IDEAS home Printed from https://ideas.repec.org/a/ddj/fseeai/y2022i1p82-86.html
   My bibliography  Save this article

The Effect of Corporate Tax on Foreign Direct Investments: A Panel Study for Turkey and European Union Countries

Author

Listed:
  • Pınar COMUK

    (Manisa Celal Bayar University, Manisa, Turkey)

  • Serkan ERCOSKUN

    (Manisa Celal Bayar University, Manisa, Turkey)

  • Gokce KAFKAS

    (Manisa Celal Bayar University, Manisa, Turkey)

Abstract

It is seen that foreign direct investments stemming from economic globalization process have been increasing all around the world. Corporate tax is one of the elements affecting foreign direct investment decision. Within this context, to analyse how corporate tax rates impact foreign direct investments by means of panel data regression model in 22 European Union countries and Turkey between the years of 2010-2019 constitutes the aim of this study. In this direction, the findings obtained from applied Hausman test analysis indicate us that it is necessary to be accepted fixed effects model from the models used in panel data analysis. According to the results of panel data analysis, it has been obtained to the results indicating that there is correlation between different variance, autocorrelation and interdivisional in the fixed effects model obtained from this study. When the findings from the study are examined, it is seen that corporate tax has a adverse impact on foreign direct investmens.

Suggested Citation

  • Pınar COMUK & Serkan ERCOSKUN & Gokce KAFKAS, 2022. "The Effect of Corporate Tax on Foreign Direct Investments: A Panel Study for Turkey and European Union Countries," Economics and Applied Informatics, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, issue 1, pages 82-86.
    • Handle: RePEc:ddj:fseeai:y:2022:i:1:p:82-86
    DOI: 10.35219/eai15840409249
    as

    Download full text from publisher

    File URL: http://www.eia.feaa.ugal.ro/images/eia/2022_1/Comuk_Ercoskun_Kafkas.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.35219/eai15840409249?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Globerman, Steven & Shapiro, Daniel, 2002. "Global Foreign Direct Investment Flows: The Role of Governance Infrastructure," World Development, Elsevier, vol. 30(11), pages 1899-1919, November.
    2. Kostial, Kristina & Gropp, Reint, 2000. "The disappearing tax base: is foreign direct investment eroding corporate income taxes?," Working Paper Series 31, European Central Bank.
    3. Marcin Piatkowski & Mariusz Jarmuzek, 2008. "Zero Corporate Income Tax in Moldova: Tax Competition and Its Implications for Eastern Europe," IMF Working Papers 2008/203, International Monetary Fund.
    4. Parisa Samimi & Hashem Salarzadeh Jenatabadi, 2014. "Globalization and Economic Growth: Empirical Evidence on the Role of Complementarities," PLOS ONE, Public Library of Science, vol. 9(4), pages 1-7, April.
    5. Seth Nana Kwame Appiah-Kubi & Karel Malec & Joseph Phiri & Mansoor Maitah & Zdeňka Gebeltová & Luboš Smutka & Vojtech Blazek & Kamil Maitah & Jitka Sirohi, 2021. "Impact of Tax Incentives on Foreign Direct Investment: Evidence from Africa," Sustainability, MDPI, vol. 13(15), pages 1-12, August.
    6. Mr. Reint Gropp & Ms. Kristina Kostial, 2000. "The Disappearing Tax Base: Is Foreign Direct Investment (FDI) Eroding Corporate Income Taxes?," IMF Working Papers 2000/173, International Monetary Fund.
    7. Robert E. Lipsey, 2001. "Foreign Direct Investment and the Operations of Multinational Firms: Concepts, History, and Data," NBER Working Papers 8665, National Bureau of Economic Research, Inc.
    8. David G. Hartman, 1981. "Tax Policy and Foreign Direct Investment," NBER Working Papers 0689, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dukata Radoja, 2017. "The Importance of Professional Training for Establishing Psychological Health Workers," European Journal of Multidisciplinary Studies Articles, Revistia Research and Publishing, vol. 2, ejms_v2_i.
    2. Chigozie Andy Ngwaba, 2023. "Corporate taxes and FDI in developing economies," International Economics and Economic Policy, Springer, vol. 20(4), pages 613-633, October.
    3. Céline Azémar & Andrew Delios, 2007. "The Tax Sparing Provision Influence: A Credit versus Exempt Investors Analysis," Working Papers 2007_31, Business School - Economics, University of Glasgow.
    4. Assaf Razin & Efraim Sadka, 2007. "Productivity and Taxes as Drivers of FDI," Working Papers 172007, Hong Kong Institute for Monetary Research.
    5. Abdramane Camara, 2023. "The Effect of Foreign Direct Investment on Tax Revenue," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(1), pages 168-190, March.
    6. Frank Barry, 2006. "Foreign direct investment and institutional co-evolution in Ireland," Working Papers 200603, School of Economics, University College Dublin.
    7. Muhammad Zakaria & Wen Jun & Arooj Khan, 2023. "Effects Of Capital Inflows On Fiscal Balance In An Emerging Economy: Evidence From Pakistan," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(05), pages 1585-1598, September.
    8. Abdramane Camara, 2019. "The effect of foreign direct investment on tax revenue in developing countries," Working Papers hal-03188025, HAL.
    9. Luca Colombo & Paola Labrecciosa & Patrick Paul Walsh, 2005. "Optimal Corporation Tax: An I.O. Approach," The Institute for International Integration Studies Discussion Paper Series iiisdp97, IIIS.
    10. Barry, Frank, 2005. "FDI, transfer pricing and the measurement of R&D intensity," Research Policy, Elsevier, vol. 34(5), pages 673-681, June.
    11. Mr. Peter J. Mullins, 2006. "Moving to Territoriality? Implications for the United States and the Rest of the World," IMF Working Papers 2006/161, International Monetary Fund.
    12. Crafts, Nicholas, 2008. "The Celtic Tiger In Historical And International Perspective," Economic Research Papers 269878, University of Warwick - Department of Economics.
    13. Olgica Glavaški & Emilija Beker Pucar & Marina Beljić & Stefan Stojkov, 2022. "Coordination vs. Competitiveness of Effective Average Tax Rates in Relation to FDI: The Case of Emerging EU Economies," Sustainability, MDPI, vol. 15(1), pages 1-20, December.
    14. Görg, Holger & Molana, Hassan & Montagna, Catia, 2009. "Foreign direct investment, tax competition and social expenditure," International Review of Economics & Finance, Elsevier, vol. 18(1), pages 31-37, January.
    15. Agnès Bénassy-Quéré & Lionel Fontagné & Amina Lahrèche-Révil, 2005. "How Does FDI React to Corporate Taxation?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(5), pages 583-603, September.
    16. Céline Azémar & Rodolphe Desbordes, 2009. "Public Governance, Health and Foreign Direct Investment in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 18(4), pages 667-709, August.
    17. Luo, Changyuan & Luo, Qin & Zeng, Shuai, 2022. "Bilateral tax agreement and FDI inflows: Evidence from Hong Kong investment in the Mainland China," China Economic Review, Elsevier, vol. 73(C).
    18. Emmanuel Bretin & Stéphane Guimbert & Thierry Madiès, 2002. "La concurrence fiscale sur le bénéfice des entreprises : théories et pratiques," Économie et Prévision, Programme National Persée, vol. 156(5), pages 15-42.
    19. Ludovic Feulefack Kemmanang, 2021. "Do thin capitalization rules crowd out multinational firms in Africa? Looking towards efficiency in revenue mobilization," Economics Bulletin, AccessEcon, vol. 41(2), pages 594-603.
    20. Brendan M. Walsh, 2003. "Taxation and foreign direct investment in Ireland," Open Access publications 10197/1602, School of Economics, University College Dublin.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ddj:fseeai:y:2022:i:1:p:82-86. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gianina Mihai (email available below). General contact details of provider: https://edirc.repec.org/data/fegalro.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.