Multiple taxes and alternative forms of FDI: evidence from cross-border acquisitions

Herger, Nils; Kotsogiannis, Christos; McCorriston, Steve (2016). Multiple taxes and alternative forms of FDI: evidence from cross-border acquisitions. International Tax and Public Finance, 23(1), pp. 82-113. Springer 10.1007/s10797-015-9351-6

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This paper explores the role of tax instruments in affecting foreign direct investment (FDI), paying particular attention on their effect on two forms of FDI strategy, ‘horizontal’ and ‘vertical’. Applying a decomposition of FDI strategies to the universe of cross-border mergers (the dominant form of FDI) over the period 1999–2010, it emerges that taxes have a much more nuanced effect on FDI than frequently suggested; while corporate taxes affect FDI negatively, the tax elasticity varies depending on the FDI strategy (with vertical FDI being in general more responsive), the exact measure of taxation, and international tax considerations (double taxation, withholding taxes). Sales taxes also affect FDI, but only horizontally.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Herger, Nils

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0927-5940

Publisher:

Springer

Language:

English

Submitter:

Eva Marina Zuberbühler

Date Deposited:

11 Jul 2017 08:58

Last Modified:

11 Jul 2017 08:58

Publisher DOI:

10.1007/s10797-015-9351-6

BORIS DOI:

10.7892/boris.93178

URI:

https://boris.unibe.ch/id/eprint/93178

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