Corporate taxes and the location of FDI in Europe using firm-level data
European countries are facing an ever-increasing competition for Foreign Direct Investment (FDI). This paper studies how corporate taxes affect the location of FDI in Europe. Firm-level data is used to estimate a conditional logit model. We start by analysing the impact of the level and volatility of three different tax rates on FDI. Next, we analyse how economic and monetary integration influences the effect of taxes on FDI. The interaction between taxes and the upward and downward cycles of FDI is also analysed. Finally, we focus on how the impact of taxes depends on project characteristics. We conclude that taxes play a significant role in attracting FDI, but the issues analysed imply that there are some nuances in this relation, many of them relevant for policy makers.
|Date of creation:||Dec 2011|
|Date of revision:||Dec 2011|
|Contact details of provider:|| Postal: Avenida da República no 79, 1050-243 Lisboa|
Phone: 21 799 81 50
Fax: 21 799 81 54
Web page: http://www.gee.min-economia.pt
More information through EDIRC
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.:
- Fritz Breuss, 2001.
"Macroeconomic Effects of EU Enlargement on Old and New Members,"
WIFO Monatsberichte (monthly reports),
WIFO, vol. 74(11), pages 655-666, November.
- Fritz Breuss, "undated". "Macroeconomic Effects of EU Enlargement for Old and New Members," WIFO Working Papers 143, WIFO.
- Haufler, A. & Schjelderup, G., 1999.
"Corporate Tax Systems and Cross Country Profit Shifting,"
1/99, Norwegian School of Economics and Business Administration-.
- Haufler, Andreas & Schjelderup, Guttorm, 2000. "Corporate Tax Systems and Cross Country Profit Shifting," Oxford Economic Papers, Oxford University Press, vol. 52(2), pages 306-325, April.
- Haufler, Andreas & Schjelderup, Guttorm, 2000. "Corporate tax systems and cross country profit shifting," Munich Reprints in Economics 20419, University of Munich, Department of Economics.
- Harry Huizinga & Luc Laeven, 2006.
"International profit shifting within multinationals: a multi-country perspective,"
European Economy - Economic Papers 2008 - 2015
260, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
- Huizinga, Harry & Laeven, Luc, 2008. "International profit shifting within multinationals: A multi-country perspective," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1164-1182, June.
- Kelly Edmiston & Shannon Mudd & Neven Valev, 2003. "Tax Structures and FDI: The Deterrent Effects of Complexity and Uncertainty," Fiscal Studies, Institute for Fiscal Studies, vol. 24(3), pages 341-359, September.
- repec:ntj:journl:v:41:y:1988:i:no._1:p:109-21 is not listed on IDEAS
- Young, Kan H., 1988. "The Effects of Taxes and Rates of Return on Foreign Direct Investment in the United States," National Tax Journal, National Tax Association, vol. 41(1), pages 109-121, March.
When requesting a correction, please mention this item's handle: RePEc:mde:wpaper:0044. 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: (Ricardo Pinheiro Alves)
If references are entirely missing, you can add them using this form.