Dependent variables PBT Profit before...

Dependent variables
PBT	Profit before income tax expense of the subsidiary-year in thousands of euro
ln(PBT)	Natural logarithm of profit before income tax expense of the subsidiary-year
Independent variables
Ownership subsidiaries	$\frac{1}{1 - y_{i}} \frac{\sum_{k \neq i}^{n} \frac{B_{k}}{1 - y_{k}} (y_{i} - y_{k})}{\sum_{k = 1}^{n} \frac{B_{k}}{1 - y_{k}}}$ where γ_i is the percentage of control (voting rights) of subsidiary i γ_k is the percentage of control (voting rights) of subsidiary k, where k runs from 1 to n, where n is the number of subsidiaries controlled by the parent B_k is the true profit of subsidiary k. Revenue is used as a proxy
C tax foreign subsidiaries	$\frac{1}{1 - π_{i}} \frac{\sum_{k \neq i}^{n} \frac{B_{k}}{1 - π_{k}} (π_{i} - π_{k})}{\sum_{k = 1}^{n} \frac{B_{k}}{1 - π_{k}}}$ where π_i is the statutory tax rate of subsidiary i π_k is the statutory tax rate of subsidiary k, where k runs from 1 to n, where n is the number of subsidiaries controlled by the parent B_k is the true profit of subsidiary k. Revenue is used as a proxy π statutory tax rate comes from Worldwide Corporate Tax Guide developed every year by Ernst & Young
Tangible Assets	Tangible fixed assets reported by the subsidiary in thousands of euro
ln(Tangible Assets)	Natural logarithm of tangible fixed assets reported by the subsidiary
CompExp	Labor compensation reported by the subsidiary in thousands of euro
ln(CompExp)	Natural logarithm of labor compensation reported by the subsidiary
GDP	Per capita GDP in the subsidiaries’ country
ln(GDP)	Natural logarithm of per capita GDP in the subsidiaries’ country
Minority protection index	The Global Competitiveness Index has 12 pillars Pillar 1 – Institutions includes 1. Public Institutions 2. Private Institutions Private Institutions includes 1. Corporate ethics 2. Accountability Accountability includes 1. Strength of auditing and reporting standards 2. Efficacy of corporate boards 3. Protection of minority shareholder interests 4. Strength of investor protection Protection of minority shareholder interests is the answer to the following question: “In your country, to what extent are the interests of minority shareholders protected by the legal system? [1 = not protected at all; 7 = fully protected]”. World Economic Forum, Executive Opinion Survey

Dependent variables
PBT	Profit before income tax expense of the subsidiary-year in thousands of euro
ln(PBT)	Natural logarithm of profit before income tax expense of the subsidiary-year
Independent variables
Ownership subsidiaries	$\frac{1}{1 - y_{i}} \frac{\sum_{k \neq i}^{n} \frac{B_{k}}{1 - y_{k}} (y_{i} - y_{k})}{\sum_{k = 1}^{n} \frac{B_{k}}{1 - y_{k}}}$ whereγ_i is the percentage of control (voting rights) of subsidiary iγ_k is the percentage of control (voting rights) of subsidiary k, where k runs from 1 to n, where n is the number of subsidiaries controlled by the parentB_k is the true profit of subsidiary k. Revenue is used as a proxy
C tax foreign subsidiaries	$\frac{1}{1 - π_{i}} \frac{\sum_{k \neq i}^{n} \frac{B_{k}}{1 - π_{k}} (π_{i} - π_{k})}{\sum_{k = 1}^{n} \frac{B_{k}}{1 - π_{k}}}$ whereπ_i is the statutory tax rate of subsidiary iπ_k is the statutory tax rate of subsidiary k, where k runs from 1 to n, where n is the number of subsidiaries controlled by the parentB_k is the true profit of subsidiary k. Revenue is used as a proxyπ statutory tax rate comes from Worldwide Corporate Tax Guide developed every year by Ernst & Young
Tangible Assets	Tangible fixed assets reported by the subsidiary in thousands of euro
ln(Tangible Assets)	Natural logarithm of tangible fixed assets reported by the subsidiary
CompExp	Labor compensation reported by the subsidiary in thousands of euro
ln(CompExp)	Natural logarithm of labor compensation reported by the subsidiary
GDP	Per capita GDP in the subsidiaries’ country
ln(GDP)	Natural logarithm of per capita GDP in the subsidiaries’ country
Minority protection index	The Global Competitiveness Index has 12 pillarsPillar 1 – Institutions includes1. Public Institutions2. Private InstitutionsPrivate Institutions includes1. Corporate ethics2. AccountabilityAccountability includes1. Strength of auditing and reporting standards2. Efficacy of corporate boards3. Protection of minority shareholder interests4. Strength of investor protectionProtection of minority shareholder interests is the answer to the following question: “In your country, to what extent are the interests of minority shareholders protected by the legal system? [1 = not protected at all; 7 = fully protected]”. World Economic Forum, Executive Opinion Survey

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