Base erosion refers to tax avoidance strategies involving multinational enterprises (MNEs) changing the order of worth of their economic activities across host locations. This leads to a loss in corporate tax revenues, unfair competition between domestic enterprises and MNEs, and a challenge to the legitimacy and power of host nation-states. In problematizing base erosion, theories of internationalization and internalization explicate the MNEs’ perspective on their processes, governance modes and value-creation. Host policymakers, however, take a different perspective on firm judgements from top management and their external advisors. Although the theory of social judgements explains how cognitive and sociopolitical legitimacy judgements are formed, little attention is paid in the theory to how intra-field cognitive legitimacy judgements may be challenged. Drawing on archival material and in-depth interviews, I make the following three contributions. Firstly, I develop a thick description for a host policymakers’ conceptual model of MNEs’ value- alignment process across host locations. Secondly, I extend the organizing views on transfer pricing to explain base erosion as an MNE practice for changing the order of worth. Thirdly, I contribute to the social judgements literature by identifying the conditions and the means for bridging cognitive and sociopolitical legitimacy judgements. These contributions are important because they shed new light on base erosion, providing theoretical constructs for the MNE value-alignment process, the organizing views on transfer pricing and the communicative means for shifting interfield discourse from cognitive to evaluative modes.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:737714 |
| Date | January 2017 |
| Creators | Fernandes, Orlando J. |
| Publisher | University of Warwick |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://wrap.warwick.ac.uk/99183/ |
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