IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Fdi And Taxation: A Meta‐Study

  • Lars P. Feld
  • Jost H. Heckemeyer

Despite the continuing political interest in the usefulness of tax competition and tax coordination as well as the wealth of theoretical analyses, it still remains open whether or when tax competition is harmful. Moreover, the influence of tax differentials on multinationals’ decisions is still insufficiently analyzed. Thus, economists have increasingly resorted to empirical analysis in order to gain insights on the elasticity of FDI with respect to company taxation. As a result, the empirical literature on taxation and international capital flows has grown to a similar abundance during the last 25 years as the respective theoretical literature. Its heterogeneity leads to a rising need for concise reviews on the existing empirical evidence. In this paper we extend former meta-analyses on FDI and taxation in three ways. First, we add the most recent publications unconsidered in meta-analyses up-to-date. Second, we apply a different methodology by using a broad set of meta-regression estimators and explicitly discuss which one is most suitable for application to our meta-data. Third, we address some important issues in research on FDI and taxation to the clarification of which meta-analysis can make valuable contributions. These issues are mainly: The influence of variables which might moderate effects of tax differentials (e.g. public spending), the implications of using aggregate FDI data as opposed to firm-level information on measured tax effects, the implications of bilateral effective tax rates, and the possible presence of publication bias in primary research.

(This abstract was borrowed from another version of this item.)

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Article provided by Wiley Blackwell in its journal Journal of Economic Surveys.

Volume (Year): 25 (2011)
Issue (Month): 2 (04)
Pages: 233-272

as
in new window

Handle: RePEc:bla:jecsur:v:25:y:2011:i:2:p:233-272
Contact details of provider: Web page: http://www.blackwellpublishing.com/journal.asp?ref=0950-0804

Order Information: Web: http://www.blackwellpublishing.com/subs.asp?ref=0950-0804

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Stephen B. Jarrell & T. D. Stanley, 1990. "A meta-analysis of the union-nonunion wage gap," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 44(1), pages 54-67, October.
  2. Ruud de Mooij & S. Ederveen, 2001. "Taxation and foreign direct investment; a synthesis of empirical research," CPB Discussion Paper 3, CPB Netherlands Bureau for Economic Policy Analysis.
  3. Pedro R. D. Bom & Jenny Ligthart, 2008. "How Productive is Public Capital? A Meta-Analysis," CESifo Working Paper Series 2206, CESifo Group Munich.
  4. Walter Sosa Escudero & Anil K. Bera, 2005. "Tests for Unbalanced Error Components Models Under Local Misspecification," Working Papers 81, Universidad de San Andres, Departamento de Economia, revised Dec 2007.
  5. T. D. Stanley, 2005. "Beyond Publication Bias," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 309-345, 07.
  6. Stanley, T. D., 2000. "An empirical critique of the Lucas critique," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 29(1), pages 91-107.
  7. Brons, Martijn & Nijkamp, Peter & Pels, Eric & Rietveld, Piet, 2008. "A meta-analysis of the price elasticity of gasoline demand. A SUR approach," Energy Economics, Elsevier, vol. 30(5), pages 2105-2122, September.
  8. Peter Egger & Simon Loretz & Michael Pfaffermayr & Hannes Winner, 2009. "Bilateral effective tax rates and foreign direct investment," International Tax and Public Finance, Springer, vol. 16(6), pages 822-849, December.
  9. Marius Brülhart & Mario Jametti & Kurt Schmidheiny, 2007. "Do agglomeration economies reduce the sensitivity of firm location to tax differentials?," Economics Working Papers 1062, Department of Economics and Business, Universitat Pompeu Fabra.
  10. Buettner, Thiess & Ruf, Martin, 2005. "Tax incentives and the location of FDI: evidence from a panel of German multinationals," Discussion Paper Series 1: Economic Studies 2005,17, Deutsche Bundesbank, Research Centre.
  11. Thushyanthan Baskaran & Lars P. Feld & Jan Schnellenbach, 2014. "Fiscal Federalism, Decentralization and Economic Growth: Survey and Meta-Analysis," CESifo Working Paper Series 4985, CESifo Group Munich.
  12. Charles M. Tiebout, 1956. "A Pure Theory of Local Expenditures," Journal of Political Economy, University of Chicago Press, vol. 64, pages 416.
  13. Shang-Jin Wei, 1997. "How Taxing is Corruption on International Investors?," William Davidson Institute Working Papers Series 63, William Davidson Institute at the University of Michigan.
  14. Brueckner, Jan K., 1979. "Property values, local public expenditure and economic efficiency," Journal of Public Economics, Elsevier, vol. 11(2), pages 223-245, March.
  15. Agnès Bénassy-Quéré & Lionel Fontagné & Amina Lahreche-Révil, 2005. "How Does FDI React to Corporate Taxation?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00270515, HAL.
  16. Baldwin, Richard E. & Krugman, Paul, 2004. "Agglomeration, integration and tax harmonisation," European Economic Review, Elsevier, vol. 48(1), pages 1-23, February.
  17. Ignatius J. Horstmann & James R. Markusen, 1990. "Endogenous Market Structures in International Trade," NBER Working Papers 3283, National Bureau of Economic Research, Inc.
  18. James R. Markusen, 2004. "Multinational Firms and the Theory of International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262633078, June.
  19. Brueckner, Jan K., 1982. "A test for allocative efficiency in the local public sector," Journal of Public Economics, Elsevier, vol. 19(3), pages 311-331, December.
  20. Stephen B. Jarrell & T. D. Stanley, 1990. "A Meta-Analysis of the Union-Nonunion Wage Gap," ILR Review, Cornell University, ILR School, vol. 44(1), pages 54-67, October.
  21. Donatella Gatti, 2009. "Macroeconomic effects of ownership structure in OECD countries ," Industrial and Corporate Change, Oxford University Press, vol. 18(5), pages 901-928, October.
  22. Zodrow, George R. & Mieszkowski, Peter, 1986. "Pigou, Tiebout, property taxation, and the underprovision of local public goods," Journal of Urban Economics, Elsevier, vol. 19(3), pages 356-370, May.
  23. Spoerer Mark, 2002. "Wann begannen Fiskal- und Steuerwettbewerb?," Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook, De Gruyter, vol. 43(2), pages 35-60, December.
  24. Timothy J. Bartik, 1991. "Who Benefits from State and Local Economic Development Policies?," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number wbsle, October.
  25. Sinn, Hans-Werner, 2004. "The new systems competition," Munich Reprints in Economics 19608, University of Munich, Department of Economics.
  26. Michael Overesch & Georg Wamser, 2009. "Who Cares About Corporate Taxation? Asymmetric Tax Effects on Outbound FDI," The World Economy, Wiley Blackwell, vol. 32(12), pages 1657-1684, December.
  27. Christian Bellak & Markus Leibrecht & Joze P. Damijan, 2007. "Infrastructure endowment and corporate income taxes as determinants of Foreign Direct Investment in Central- and Eastern European Countries," LICOS Discussion Papers 19307, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  28. T.D. Stanley & Stephen B. Jarrell, 1998. "Gender Wage Discrimination Bias? A Meta-Regression Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 33(4), pages 947-973.
  29. Elhanan Helpman, 1985. "Multinational Corporations and Trade Structure," Review of Economic Studies, Oxford University Press, vol. 52(3), pages 443-457.
  30. Grubert, Harry & Mutti, John, 1991. "Taxes, Tariffs and Transfer Pricing in Multinational Corporate Decision Making," The Review of Economics and Statistics, MIT Press, vol. 73(2), pages 285-93, May.
  31. Stanley, T D & Jarrell, Stephen B, 1989. " Meta-Regression Analysis: A Quantitative Method of Literature Survey s," Journal of Economic Surveys, Wiley Blackwell, vol. 3(2), pages 161-70.
  32. James R. Markusen, 1997. "Trade versus Investment Liberalization," NBER Working Papers 6231, National Bureau of Economic Research, Inc.
  33. T. D. Stanley, 2001. "Wheat from Chaff: Meta-analysis as Quantitative Literature Review," Journal of Economic Perspectives, American Economic Association, vol. 15(3), pages 131-150, Summer.
  34. Helene Erkel-Rousse & Daniel Mirza, 2000. "Import Price-Elastcities: Reconsidering the Evidence," Econometric Society World Congress 2000 Contributed Papers 0909, Econometric Society.
  35. Buettner, Thiess, 2002. "The impact of taxes and public spending on the location of FDI: evidence from FDI-flows within Europe," ZEW Discussion Papers 02-17, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  36. Bartik, Timothy J, 1985. "Business Location Decisions in the United States: Estimates of the Effects of Unionization, Taxes, and Other Characteristics of States," Journal of Business & Economic Statistics, American Statistical Association, vol. 3(1), pages 14-22, January.
  37. Keen, Michael & Marchand, Maurice, 1997. "Fiscal competition and the pattern of public spending," Journal of Public Economics, Elsevier, vol. 66(1), pages 33-53, October.
  38. Austin Nichols & Mark E Schaffer, 2007. "Clustered standard errors in Stata," United Kingdom Stata Users' Group Meetings 2007 07, Stata Users Group.
  39. Papke, Leslie E., 1991. "Interstate business tax differentials and new firm location : Evidence from panel data," Journal of Public Economics, Elsevier, vol. 45(1), pages 47-68, June.
  40. Wolff, Guntram B., 2006. "Foreign direct investment in the enlarged EU: do taxes matter and to what extent?," Discussion Paper Series 1: Economic Studies 2006,13, Deutsche Bundesbank, Research Centre.
  41. Markusen, James R. & Venables, Anthony J. & Eby Konan, Denise & Zhang, Kevin H., 1996. "A Unified Treatment of Horizontal Direct Investment, Vertical Direct Investment, and the Pattern of Trade in Goods and Services," Working Paper Series 465, Research Institute of Industrial Economics.
  42. Bruce A. Blonigen, 2005. "A Review of the Empirical Literature on FDI Determinants," NBER Working Papers 11299, National Bureau of Economic Research, Inc.
  43. T. D. Stanley, 2008. "Meta-Regression Methods for Detecting and Estimating Empirical Effects in the Presence of Publication Selection," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 70(1), pages 103-127, 02.
  44. Steven Cassou, 1997. "The link between tax rates and foreign direct investment," Applied Economics, Taylor & Francis Journals, vol. 29(10), pages 1295-1301.
  45. Thiess Buettner & Georg Wamser, 2009. "The impact of nonprofit taxes on foreign direct investment: evidence from German multinationals," International Tax and Public Finance, Springer, vol. 16(3), pages 298-320, June.
  46. Beckmann, Rainer, 2007. "Profitability of Western European banking systems: panel evidence on structural and cyclical determinants," Discussion Paper Series 2: Banking and Financial Studies 2007,17, Deutsche Bundesbank, Research Centre.
  47. Albert Wijeweera & Brian Dollery & Don Clark, 2007. "Corporate tax rates and foreign direct investment in the United States," Applied Economics, Taylor & Francis Journals, vol. 39(1), pages 109-117.
  48. Desai, Mihir A. & Foley, C. Fritz & Hines, James Jr., 2004. "Foreign direct investment in a world of multiple taxes," Journal of Public Economics, Elsevier, vol. 88(12), pages 2727-2744, December.
  49. Wilson, John Douglas & Wildasin, David E., 2004. "Capital tax competition: bane or boon," Journal of Public Economics, Elsevier, vol. 88(6), pages 1065-1091, June.
  50. Stephen B. Jarrell & T. D. Stanley, 2004. "Declining Bias and Gender Wage Discrimination? A Meta-Regression Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 39(3).
  51. Hines, James R, Jr, 1996. "Altered States: Taxes and the Location of Foreign Direct Investment in America," American Economic Review, American Economic Association, vol. 86(5), pages 1076-94, December.
  52. Gustavo J. Bobonis & Howard J. Shatz, 2007. "Agglomeration, Adjustment, and State Policies in the Location of Foreign Direct Investment in the United States," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 30-43, February.
  53. Assaf Razin & Yona Rubinstein & Efraim Sadka, 2005. "Corporate Taxation and Bilateral FDI with Threshold Barriers," NBER Working Papers 11196, National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

This item is featured on the following reading lists or Wikipedia pages:

  1. Meta-Analysis in Economics

When requesting a correction, please mention this item's handle: RePEc:bla:jecsur:v:25:y:2011:i:2:p:233-272. 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: (Wiley-Blackwell Digital Licensing)

or (Christopher F. Baum)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.