Corporate Taxation, Agglomeration and FDI: Firm Level Evidence for Belgium
This paper analyzes the sensitivity of Belgian outbound FDI to cor- porate taxation rates and economic clustering. Our approach involves detailed balance sheet data of the foreign aliates as our proxy of FDI and a measure of regional knowledge spillovers as agglomeration variable. The results reveal that investments are sensitive to changes in fiscal policy, with an average tax sensitivity of around -1.5. We also pick up an effect of agglomeration economies: a regional increase in the number of own industry firms dampens tax sensitivity.
|Date of creation:||2011|
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