FDI and Taxation: A Meta-Study

By Lars P. Feld, Jost H. Heckemeyer. Social Science Research Network, 2011

371 citations recorded by the source corpus.

Despite the continuing political interest in the usefulness of tax competition and tax coordination as well as the wealth of theoretical analyses, it still remains open whether or when tax competition is harmful. Moreover, the influence of tax differentials on multinationals' decisions is still insufficiently analyzed. Thus, economists have increasingly resorted to empirical analysis in order to gain insights on the elasticity of FDI with respect to company taxation. As a result, the empirical literature on taxation and international capital flows has grown to a similar abundance during the last 25 years as the respective theoretical literature. Its heterogeneity leads to a rising need for concise reviews on the existing empirical evidence. In this paper we extend former meta-analyses on FDI and taxation in three ways. First, we add the most recent publications unconsidered in meta-analyses up-to-date. Second, we apply a different methodology by using a broad set of meta-regression estimators and explicitly discuss which one is most suitable for application to our meta-data. Third, we address some important issues in research on FDI and taxation to the clarification of which meta-analysis can make valuable contributions. These issues are mainly: The influence of variables which might moderate effects of tax differentials (e.g. public spending), the implications of using aggregate FDI data as opposed to firm-level information on measured tax effects, the implications of bilateral effective tax rates, and the possible presence of publication bias in primary research.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/914e0dba8adcce942a2444b8d9767eabdc0d30c9

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Citations in the corpus

The Impact of Taxation on Economic Growth: Case Study of OECD Countries (2015, background): “Negative relation between corporate taxation and foreign direct investment (FDI) was confirmed by e.g. Schraztenstaller, Wagener and Kohler-Toglhofer (2005), or by Feld and Heckemeyer (2008), whereas Brebler (2012) claims that lower taxation rate represents the factor stimulating the inflow of FDI.”
Top Management Team Diversity (2013, background): “To cite only a few, the works of Stanley (2005, 2008), Doucouliagos (2005), and Feld and Heckemeyer (2011) provide strong evidence for the existence of publication bias and explain various methods to detect it.”
Capital Structure Choice and Company Taxation: A Meta-Study (2013, neutral): “5 Meta-analysis is applied, for example, in the field of international economics by Goerg and Strobl (2001) on productivity spillovers associated with multinational firm activity, by De Mooij and Ederveen (2003) or Feld and Heckemeyer (2011) on taxation and foreign direct investment; in the field of”
The Own-Wage Elasticity of Labor Demand: A Meta-Regression Analysis (2014, methodology): “In line with standard meta-regression analysis techniques (Card et al., 2010; Feld and Heckemeyer, 2011), we assume that the i estimate of the own-wage elasticity of study s, ηis, is obtained by means of an econometric technique such that ηis varies around its true value η0 due to sampling error ( i”