An empiric approach of the FDI-taxation relationship in Romania
In the heart of the debate on the appropriate level of the profit tax burden on host countries lies a challenging question: How does FDI respond to tax rates? Studies analyzing inter-state fluctuation show that, on average, FDI decreases by 3.7% when corporate tax rates increase by one percentage point, other studies show that the FDI decline varies between 0 and 5%. Such variations reflect differences between nations and industries studied, as well as differences between time periods which have been considered. More recent studies show that FDI becomes increasingly sensitive to tax reflecting a growing mobility of capital as non-tax barriers, previously in the way of FDI, are eliminated (OCDE, 2008). The present article aims to study the effects of tax upon foreign direct investment in Romania. The period studied prolongs on ten years, from 1999 to 2009, with the aim to observe the effects of modifications upon tax revenues, direct tax and indirect tax on foreign investment in Romania. To study the relationship between the variables, econometric modelling has been used thanks to the software package Eviews 5.0. This paper’s main conclusion is that foreign direct investment are not discouraged by the level of tax in Romania, on the contrary, they are stimulated by an eventual increase in tax revenue.
Volume (Year): XVIII(2012) (2012)
Issue (Month): 10(575) (October)
|Contact details of provider:|| Postal: |
Phone: +40 21 3 12 22 48
Fax: +40 21 3 12 97 17
Web page: http://www.asociatiaeconomistilor.ro/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:agr:journl:v:10(575):y:2012:i:10(575):p:15-30. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Marin Dinu)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.