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Tax Treaties and Foreign Direct Investment: Potential versus Performance

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  • Ronald B. Davies

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Abstract

Bilateral tax treaties are an important method of international tax cooperation. I survey the existing literature on these agreements, highlighting the differences between the standard view that treaties increase foreign direct investment and the empirical evidence that finds little support for this. I also discuss the key differences in treaty formation between developed countries relative to that between developed and developing nations.

Suggested Citation

  • Ronald B. Davies, 2004. "Tax Treaties and Foreign Direct Investment: Potential versus Performance," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(6), pages 775-802, November.
  • Handle: RePEc:kap:itaxpf:v:11:y:2004:i:6:p:775-802
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