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Impact of Double Taxation Treaties on Inward FDI in Latin American and Caribbean Developing Countries

Author

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  • Mumtaz Hussain Shah

    (Institute of Management Studies, UoP, Peshawar)

  • Saba Qayyum

    (Institute of Management Studies, UoP, Peshawar)

Abstract

This study strives to assess the impact of double taxation treaties on FDI inflows in 15 Latin American and Caribbean developing countries from 1983 to 2013. There are two objectives of double taxation treaties. The first one is to eliminate the global double taxation, and the second is to barricade the international tax dodging. If we look at the first objective of double taxation treaties (DTTs), it encourages foreign direct investment (FDI) but keeping in view the second objective, it discourages FDI. Both effects can possibly cancel the effect of each other, leaving DTT as an insignificant factor. Previous literature has shown positive, negative and no effect of DTTs on FDI inflows. Therefore, empirically it is an open question that needs further exploration. This study by utilising other conventional FDI determinants such as market size, development level, trade openness and human capital, has empirically shown that DTTs have no effect on the FDI inflows. These countries instead of DTTs seem to be more dependent on some other FDI location pull factors, for example bigger host market, development level, trade openness, the exploitation of their natural resources, improvement of services and manufacturing sector etc. for drawing in foreign direct investment

Suggested Citation

  • Mumtaz Hussain Shah & Saba Qayyum, 2015. "Impact of Double Taxation Treaties on Inward FDI in Latin American and Caribbean Developing Countries," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 7(1), pages 1-18, April.
    • Handle: RePEc:bec:imsber:v:7:y:2015:i:1:p:1-18
    DOI: dx.doi.org/10.22547/BER/7.1.1
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    References listed on IDEAS

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    Cited by:

    1. Shah, Mumtaz Hussain & Khan, Faisal, 2019. "Telecommunication Infrastructure Development and FDI into Asian Developing Nations," MPRA Paper 107255, University Library of Munich, Germany.
    2. John Kwaku Amoh & Abdul-Mumuni Abdallah & Richard Amankwa Fosu, 2019. "Does Foreign Direct Investment Cause Financial Sector Development €“ Evidence From An Emerging Economy," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 23, pages 33-55, June.
    3. Shah, Mumtaz Hussain & Khan, Atta Ullah, 2017. "Factors determining capital structure of Pakistani non-financial firms," MPRA Paper 82015, University Library of Munich, Germany.
    4. Shah, Mumtaz Hussain, 2017. "The Significance of WTO’s Trade Related Investment Measures (TRIMs) Agreement For Inward FDI in Sub-Saharan Africa," MPRA Paper 82009, University Library of Munich, Germany.
    5. Shah, Mumtaz Hussain & Lala, Gule, 2017. "Autocracy, Democracy and FDI inflows in Asian Developing Countries," MPRA Paper 107248, University Library of Munich, Germany.
    6. Shah, Mumtaz Hussain, 2018. "Corruption & Foreign Direct Investment: The Case of South Asia," MPRA Paper 107253, University Library of Munich, Germany.
    7. Shah, Mumtaz Hussain, 2016. "Financial development and foreign direct investment: The case of Middle East and North African (MENA) developing nations," MPRA Paper 82013, University Library of Munich, Germany.
    8. Mumtaz Hussain Shah & Yahya Khan, 2016. "Trade Liberalisation and FDI Inflows in Emerging Economies," Business & Economic Review, Institute of Management Sciences, Peshawar, Pakistan, vol. 8(1), pages 35-52, April.
    9. Shah, Mumtaz Hussain & Jamil, Iqra, 2016. "Trade Agreements and Transnational Corporations Presence in the Developing Asia," MPRA Paper 107250, University Library of Munich, Germany.
    10. Magdalena Correo Henao & Daniela Amaya Castro & Mario Andrés Ospina Ramírez & Federico Suárez Ricaurte, 2021. "Pobreza y desigualdad prospectiva 2030. XXI jornadas de derecho constitucional constitucionalismo en ransformación. Prospectiva 2030," Books, Universidad Externado de Colombia, Facultad de Derecho, number 1298, March.
    11. Shah, Mumtaz Hussain & Khan, Sajjad, 2017. "Factors Effecting Commercial Banks Profitability in Pakistan," MPRA Paper 82016, University Library of Munich, Germany.
    12. Shah, Mumtaz Hussain & Khan, Fiaz, 2018. "Profitability and Working Capital Management Nexus: Evidence from Food & Personal Care Products Sector Firms Listed on Pakistan Stock Exchange," MPRA Paper 107254, University Library of Munich, Germany.
    13. Shah, Mumtaz Hussain, 2016. "The Effect of Macroeconomic Stability on Inward FDI in African Developing Countries," MPRA Paper 82014, University Library of Munich, Germany.
    14. Shah, Mumtaz Hussain & Ali, Zahid, 2016. "What Drives Foreign Direct Investment to BRICS?," MPRA Paper 107252, University Library of Munich, Germany.
    15. Shah, Mumtaz Hussain & Zeb, Aisha, 2017. "Prudent Macro Management of the Economy and Inward FDI in ASEAN Member States," MPRA Paper 107249, University Library of Munich, Germany.
    16. Shah, Mumtaz Hussain & Azam, Ayesha, 2018. "Financial Development and Investors Location Choice in The Arab World," MPRA Paper 107245, University Library of Munich, Germany.

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