The Effects of Bilateral Tax Treaties on U.S. FDI Activity

By Bruce A. Blonigen, Ronald B. Davies. 2004

349 citations recorded by the source corpus.

The effects of bilateral tax treaties on FDI activity have been unexplored, despite significant ongoing activities by countries to negotiate and ratify these treaties. This paper estimates the impact of bilateral tax treaties using both U.S. inbound and outbound FDI over the period 1980–1999. Robust to a wide variety of alternative specifications, we find little evidence that bilateral tax treaties increase FDI activity, contrary to OECD-stated goals for such treaties.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/6b6423ca0b788d79b400144ea534544855eb71a0

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

Citations in the corpus

Dyadic military conflict, security alliances, and bilateral FDI flows (2010, neutral): “….2 7 6 0 .1 4 5 9 0 .1 0 7 2 0 .1 0 2 9 0 .0 9 3 3 0 .1 6 9 8 0 .0 4 3 0 .0 1 0 3 0 .4 0 4 3 1 Journal of International Business Studies explain not only bilateral trade but also FDI flows (Bergstrand, 1989; Blonigen & Davies, 2004; Brainard, 1997; Grosse & Trevino, 1996; Grubert & Mutti, 1991).”
The Impact of Double Taxation Treaties on Foreign Direct Investment: Evidence from Large Dyadic Panel Data (2009, methodology): “Similar to Davies (2003), Blonigen and Davies (2004) find that DTTs have no positive effect on inward or outward FDI.”
Tax Treaties and Foreign Direct Investment: Potential versus Performance (2004, methodology): “Therefore, in a more recent version of the paper ( Blonigen and Davies, 2004 ), we use two separate dummy variables, one for old treaties and one for new treaties.”
Robust FDI determinants: Bayesian Model Averaging in the presence of selection bias (2012, neutral): “Studies often do not differentiate between the intensive and extensive margins; when the margins of FDI are considered, as in Blonigen and Davies (2004) results show strong positive effects of existing tax treaties on FDI, but negative effects of new tax treaties (see also Egger et al., 2006).”
FDI and the relevance of spatial linkages: do third-country effects matter for Dutch FDI? (2009, positive): “Unless indicated otherwise all variables are in logs ( Blonigen and Davies 2004 ) and, still ignoring spatial econometrics for the moment, the main differences with a standard bilateral FDI gravity model specification are as follows.”
What Drives Capital Flows? The Case of Cross-Border M&A Activity and Financial Deepening (2002, background): “I am aware of only one other paper that explores these issues — a paper by Blonigen and Davies (2001) that examines U.”
The Cyclical Nature of North-South FDI Flows (2003, background): “, Eaton and Tamura (1994), Wei (1997 and 2000), Lipsey (1999), Portes and Rey (1999), Blonigen and Davis (2000), Stein and Daude (2001), and Levy-Yeyati, Stein and Daude (2002).”
Do double taxation treaties increase foreign direct investment to developing countries? (2006, methodology): “Similarly, Blonigen and Davies (2004) in an analysis of US inbound and outbound FDI over the period 1980–99 find that treaties concluded by the US during this period had no statistically significant effect at best and a negative effect at worst on inbound and outbound FDI stocks.3 Davies (2004)…”