Author URLs
Document Type
Article
Publication Date
6-2019
Subject: LCSH
Tax accounting, Industrial procurement
Disciplines
Accounting | Finance and Financial Management | International Business
Abstract
The objective of this paper is to evaluate the changes in the elements of the value change sensitivity model and identify if there has been a significant shift in the profitability of one country to another. Validating the work on the adjusted present value (APV) formula provided by Rainish, Mensz, and Mohs (2015), this paper analyzes how the new U.S. corporate tax rates will impact a company’s sourcing decision. Also, the value-added tax (VAT) is used in all other OECD countries, except the U.S, and therefore this will be part of the evaluation. The third variable that has a crucial impact on sourcing is the average manufacturing wage of the different countries. By examining the taxation and labor system, this paper shows how these essential cost drivers influence the value-chain modeling for the global sourcing. The conclusions, recommendations and implications reached in this study are generalizable and appropriate for use in developing best practice solutions.
DOI
10.15640/v7n3a1
Repository Citation
Mohs, J. N., & Galloway, A., Evaluating the Effect of Corporate Tax Reductions on Value Chain Sourcing Decisions, Strategic Management Quarterly, June 2019, Vol. 7, No. 3, pp. 1-11.
Publisher Citation
Mohs, J. N., & Galloway, A., Evaluating the Effect of Corporate Tax Reductions on Value Chain Sourcing Decisions, Strategic Management Quarterly, June 2019, Vol. 7, No. 3, pp. 1-11.
Included in
Accounting Commons, Finance and Financial Management Commons, International Business Commons
Comments
(C) 2019 by the authors. All rights reserved.