Fiscal Policy and the Firm: Do Low Corporate Tax Rates Attract Multinational Corporations?
36 Pages Posted: 10 Jan 2007 Last revised: 23 Dec 2011
Date Written: 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.
Keywords: Foreign Direct Investment, Corporate Taxes, Race to the Bottom, Tax Competition, Multinational Corporation, Globalization
JEL Classification: E62, F21, H25, H32
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