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The Effects of Bilateral Tax Treaties on U.S. FDI Activity Author info | Abstract | Publisher info | Download info | Related research | Statistics Bruce A. Blonigen
Ronald B. Davies
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The effects of bilateral tax treaties on FDI activity have been unexplored, despite significant ongoing activities by countries to negotiate and ratify these treaties. This paper estimates the impact of bilateral tax treaties using both U.S. inbound and outbound FDI over the period 1966-1992. Our estimates suggest a statistically significant average annual increase of FDI activity for each additional year of a treaty which ranges from 2% to 8%, depending on the FDI activity measure and empirical framework we employ. Examination for nonlinear effects of treaty age on FDI activity suggests that while treaties have an immediate impact on FDI flows, there is a substantial lag before treaty adoption positively affects FDI stocks and affiliate sales. Finally, our results suggest that bilateral tax treaties have an effect on investment outside of the withholding tax rates they alter, which may include the commitment and risk reduction effects of these treaties.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
7929.
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Date of creation: Oct 2000Date of revision:
Handle: RePEc:nbr:nberwo:7929Note: ITI PEContact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
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Article Bruce A. Blonigen & Ronald B. Davies, 2004.
"The Effects of Bilateral Tax Treaties on U.S. FDI Activity ,"
International Tax and Public Finance ,
Springer, vol. 11(5), pages 601-622, 09.
[Downloadable!] Bruce Blonigen & Ronald Davies, 2004.
"The Effects of Bilateral Tax Treaties on U.S. FDI Activity ,"
Asia-Pacific Financial Markets ,
Springer, vol. 11(5), pages 601-622, September.
[Downloadable!] (restricted) Paper 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
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[Downloadable!] (restricted)
Other versions:
Bruce A. Blonigen & Ronald B. Davies, 2001.
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[Downloadable!] Bruce Blonigen & Ronald Davies, 2004.
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