Tax-Rate Differentials and Sector Specific Foreign Direct Investment: Empirical Evidence from the EU
This paper analyzes the tax responsiveness of bilateral foreign direct investment flows in the EU. Differentiating between investments in the three main economic sectors and using effective tax rates to measure tax incentives, we show that the tax sensitivity of foreign direct investment depends crucially on the sector the transaction takes place in. While investment in the primary sector is driven by other than tax incentives, investment in the secondary and the tertiary sector is deterred by high tax rates. The response in the tertiary sector is substantially higher than that in the secondary sector.
Volume (Year): 61 (2006)
Issue (Month): 4 (February)
|Contact details of provider:|| Web page: http://www.mohr.de/fa|
|Order Information:|| Postal: Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany|
When requesting a correction, please mention this item's handle: RePEc:mhr:finarc:urn:sici:0015-2218(200602)61:4_535:tdasfd_2.0.tx_2-k. 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: (Thomas Wolpert)
If references are entirely missing, you can add them using this form.