Document Type


Publication Date


Subject: LCSH

Tax accounting, Industrial procurement


Accounting | Finance and Financial Management | International Business


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.


(C) 2019 by the authors. All rights reserved.



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.