The link between tax rates and foreign direct investment
This paper investigates the impact of tax policy on foreign direct investment flows between the US and other countries using a panel data empirical approach. Using panel data is an attractive alternative to using single time series data because it provides greater statistical power and offers greater flexibility in terms of explanatory variables. This study finds many significant factors influencing the transfer of funds component of foreign direct investment. Most noteworthy is that, in addition to host and home country corporate tax rates having a significant effect on investment flows, the host and home country income tax rates are also significant.
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Volume (Year): 29 (1997)
Issue (Month): 10 ()
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NBER Working Papers
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- Joel B. Slemrod, 1990. "Tax Effects on Foreign Direct Investment in the United States: Evidence from a Cross-Country Comparison," NBER Chapters, in: Taxation in the Global Economy, pages 79-122 National Bureau of Economic Research, Inc.
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