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Natural resource revenues and double taxation treaties in developing countries: Evidence from neural networks

Author

Listed:
  • Harouna Kinda

    (CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne)

  • Abrams Tagem

    (UNU-WIDER - United Nations University-Word Institut for Development Economic Research)

Abstract

This paper investigates the effects of double taxation treaties on resource revenue mobilization in 91 resource-rich countries from 2000 to 2019 by applying standard panel fixed effects and methods-of-moments approaches. We calculate countries' centrality indices by year based on their importance in the tax treaty network and show that centrality indices have a negative relationship with resource revenue mobilization—findings that are robust to alternative centrality indices and government revenue aggregates. We also use the betweenness centrality index to identify countries characterized as intermediate jurisdictions (countries classified as investment or tax hubs based on their betweenness centrality index, which is above the median) with whom countries sign tax treaties, arguing that multinational companies can structure their investments to benefit from the low tax burden countries with large treaty networks. Applying the entropy balancing method, we find evidence of a negative effect on resource revenue mobilization due to signing tax treaties with country-classified investment or tax hubs. JEL Codes: F21, F23, H26, Q32

Suggested Citation

  • Harouna Kinda & Abrams Tagem, 2024. "Natural resource revenues and double taxation treaties in developing countries: Evidence from neural networks," Post-Print hal-04783961, HAL.
    • Handle: RePEc:hal:journl:hal-04783961
    as

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    More about this item

    Keywords

    centrality indices; double taxation treaties; entropy balancing; resource revenue mobilization; withholding taxes.;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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