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Foreign Ownership and Corporate Income Taxation: An Empirical Evaluation

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Author Info

  • Harry Huizinga

    (Tilburg University)

  • Gaetan Nicodeme

    (Solvay Business School)

Abstract

Economic integration in Europe has not led to a ‘race to the bottom’ regarding corporate income taxes. This paper documents trends in the foreign ownership of companies in Europe and it examines whether foreign ownership has exerted a positive influence on corporate income tax levels. Using company-level data, we document that the foreign ownership share in Europe stood at around 21.5 percent in the year 2000. The estimation suggests that a one percentage point increase in foreign ownership increases the average corporate income tax rate between a half and one percent. Further international economic integration is likely to lead to higher foreign ownership shares with a concomitant positive influence on corporate taxation levels.

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File URL: http://128.118.178.162/eps/pe/papers/0310/0310005.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Public Economics with number 0310005.

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Length: 44 pages
Date of creation: 21 Oct 2003
Date of revision:
Handle: RePEc:wpa:wuwppe:0310005

Note: Type of Document - pdf; prepared on WinNT; pages: 44
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Web page: http://128.118.178.162

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Keywords: corporate taxation; foreign ownership;

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References

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  1. European Public Finance (ECON-O-403)

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