Fiscal Policy and the Firm: Do Low Corporate Tax Rates Attract Multinational Corporations?
Nathan M. Jensen
Washington University in Saint Louis - Department of Political Science
January 1, 2007
In this paper, I explore the relationship between corporate tax rates and multinational production in the OECD from 1980-2000. I utilize a time-series-cross-sectional general error correction model to explore the impact of corporate taxation rates and FDI inflows in 19 OECD economies from 1990-2000. I find that there is no relationship between corporate taxation and the investments of multinational corporations.
Number of Pages in PDF File: 36
Keywords: Foreign Direct Investment, Corporate Taxes, Race to the Bottom, Tax Competition, Multinational Corporation, Globalization
JEL Classification: E62, F21, H25, H32
Date posted: January 10, 2007 ; Last revised: December 23, 2011