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Do Bilateral Tax Treaties Promote Foreign Investment?

Author

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  • Bruce A. Blonigen

    (University of Oregon Economics Department)

  • Ronald B. Davies

    (University of Oregon Economics Department)

Abstract

We explore the impact of bilateral tax treaties on foreign direct investment using data from OECD countries over the period 1982-1992. We find that recent treaty formation does not promote new investment, contrary to the common expectation. For certain specifications we find that treaty formation may actually reduce investment as predicted by arguments suggesting treaties are intended to reduce tax evasion rather than promote foreign investment.

Suggested Citation

  • Bruce A. Blonigen & Ronald B. Davies, 2001. "Do Bilateral Tax Treaties Promote Foreign Investment?," University of Oregon Economics Department Working Papers 2001-12, University of Oregon Economics Department, revised 01 Jun 2001.
    • Handle: RePEc:ore:uoecwp:2001-12
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    File URL: http://economics.uoregon.edu/papers/UO-2001-12_Blonigen_Bilateral_Tax.pdf
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