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What a difference does it make? Understanding the empirical literature on taxation and international capital flows

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  • Ruud A. de Mooij
  • Sjef Ederveen

Abstract

This study explains the variation in empirical estimates in the literature on the elasticity of foreign direct investment with respect to company tax levels. To that end, the meta analysis of De Mooij and Ederveen (2003) is extended by considering an alternative classification of the literature and by including new studies that have recently become available. Specific attention is paid to two new dimensions: the spatial and the time dimension of the underlying studies.

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  • Ruud A. de Mooij & Sjef Ederveen, 2006. "What a difference does it make? Understanding the empirical literature on taxation and international capital flows," European Economy - Economic Papers 2008 - 2015 261, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    • Handle: RePEc:euf:ecopap:0261
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    3. Athiphat Muthitacharoen, 2023. "Location Choice And Tax Responsiveness Of Foreign Multinationals: Evidence From Asean Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(01), pages 217-242, March.
    4. Jan Tecl, 2017. "Labor Taxes and Decision about FDI in the EU," European Financial and Accounting Journal, Prague University of Economics and Business, vol. 2017(2), pages 41-54.
    5. Cooper, Maggie & Nguyen, Quyen T.K., 2020. "Multinational enterprises and corporate tax planning: A review of literature and suggestions for a future research agenda," International Business Review, Elsevier, vol. 29(3).
    6. Nikula, Nuutti & Kotilainen, Markku, 2013. "Determinants for Foreign Direct Investment in the Baltic Sea Region," ETLA Reports 1, The Research Institute of the Finnish Economy.
    7. Cooper, Maggie & Nguyen, Quyen T.K., 2019. "Understanding the interaction of motivation and opportunity for tax planning inside US multinationals: A qualitative study," Journal of World Business, Elsevier, vol. 54(6), pages 1-1.
    8. Egger, Peter H. & Merlo, Valeria & Wamser, Georg, 2014. "Unobserved tax avoidance and the tax elasticity of FDI," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 1-18.
    9. Zagler, Martin, 2023. "Foreign direct investment, legal uncertainty and corporate income taxation," International Economics, Elsevier, vol. 173(C), pages 19-28.
    10. Päivi Karhunen & Svetlana Ledyaeva & Keith D. Brouthers, 2022. "Capital Round-Tripping: Determinants of Emerging Market Firm Investments into Offshore Financial Centers and Their Ethical Implications," Journal of Business Ethics, Springer, vol. 181(1), pages 117-137, November.
    11. K. Van Cauter & L. Van Meensel, 2007. "Recent trends in corporate income tax," Economic Review, National Bank of Belgium, issue i, pages 61-75, June.
    12. Barrios, Salvador & Huizinga, Harry & Laeven, Luc & Nicodème, Gaëtan, 2012. "International taxation and multinational firm location decisions," Journal of Public Economics, Elsevier, vol. 96(11), pages 946-958.
    13. Sebastian Beer & Mr. Alexander D Klemm & Ms. Thornton Matheson, 2018. "Tax Spillovers from US Corporate Income Tax Reform," IMF Working Papers 2018/166, International Monetary Fund.
    14. Ciriaci, Daria & Grassano, Nicola & Vezzani, Antonio, 2019. "Regulations and location choices of top R&D investors worldwide," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 29-42.
    15. Becker, Sascha O. & Egger, Peter H. & Merlo, Valeria, 2012. "How low business tax rates attract MNE activity: Municipality-level evidence from Germany," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 698-711.
    16. Marques, Mário & Pinho, Carlos & Montenegro, Tânia Menezes, 2019. "The effect of international income shifting on the link between real investment and corporate taxation," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 36(C), pages 1-1.

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