Regional vs. Global Financing Strategies for U.S. MNEs
AbstractDespite declining in 2001, foreign direct investment (FDI) surged during the 1990s. As a result, current levels of FDI flows are triple their 1990 levels. It is well documented in the literature that FDI occurs in large part among countries that are geographically close. It is also well established that the NAFTA had a significant impact on both U.S. FDI flows and hence FDI stocks. In addition, tax policies and tax treaties have been shown to be important drivers of U.S. FDI. The analysis presented in this paper confirms these earlier results. We extend the analysis, however, to show that tax treaties have a significant impact on financing patterns of U.S. MNE activities abroad. Based on these results, we argue that bilateral tax treaties should be an important part of trade agreements between the United States and Latin American partners in anticipation of a Free Trade Agreement of the Americas (FTAA).
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Bibliographic InfoPaper provided by Marquette University, Center for Global and Economic Studies and Department of Economics in its series Working Papers and Research with number 0511.
Length: 30 pages
Date of creation: Jun 2005
Date of revision:
Publication status: Published in the North American Economic and Financial Integration: Research in Global Strategic Management, Vol(10), 2004, A. Rugman, ed., Oxford: Elsevier Ltd., Publishing, pages 49-66
Find related papers by JEL classification:
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
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