Why is Corruption So Much More Taxing Than Tax? Arbitrariness Kills
This paper examines the effect of corruption-induced uncertainty on foreign direct" investment. The measure of uncertainty is constructed based on unpublished individual survey" responses on levels of corruption in host countries. The result is striking. The effect is negative statistically significant and quantitatively large. An increase in the uncertainty level from that of" Singapore to that of Mexico, at the average level of corruption in the sample raising the tax rate on multinational firms by 32 percentage points. Hence (uncertainty) effect can and does have first-order importance.
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| Length: | |
| Date of creation: | Nov 1997 |
| Date of revision: | |
| Handle: | RePEc:nbr:nberwo:6255 |
| Note: | ITI |
| Contact details of provider: | Postal: Phone: 617-868-3900 Web page: http://www.nber.org Email: More information through EDIRC
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References listed on IDEAS
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NBER Chapters,
in: Financial Deregulation and Integration in East Asia, NBER-EASE Volume 5, pages 51-75
National Bureau of Economic Research, Inc.
- Jonathan Eaton & Akiko Tamura, 1996. "Japanese and U.S. Exports and Investment as Conduits of Growth," NBER Working Papers 5457, National Bureau of Economic Research, Inc.
- Jonathan Eaton & Akiko Tamura, 1995. "Japanese and U.S. Exports and Investment as Conduits of Growth," Boston University - Institute for Economic Development 70, Boston University, Institute for Economic Development.
- Takatoshi Ito & Anne O. Krueger, 1996. "Financial Deregulation and Integration in East Asia, NBER-EASE Volume 5," NBER Books, National Bureau of Economic Research, Inc, number ito_96-1, December.
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