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dc.contributor.authorWolff, Guntram B.en_US
dc.date.accessioned2009-01-28T16:01:39Z-
dc.date.available2009-01-28T16:01:39Z-
dc.date.issued2006en_US
dc.identifier.urihttp://hdl.handle.net/10419/19640-
dc.description.abstractForeign direct investment is of increasing importance in the European Union. This paper estimates the effect of taxes on foreign direct investment (FDI) flows and on three sub-components of these flows for the countries of the en- larged European Union. The model in the spirit of gravity equations robustly explains FDI flows between the 25 member states. Sample selection needs to be addressed in the estimation. We show that the different subcomponents of FDI should and indeed do react differently to taxes. After controlling for unobserved country characteristics and common time effects, the top statutory corporate tax rate of both, source and host country, turn insignificant for total FDI and investment into equity. However, high source country taxes clearly increase the probability of firms to re-invest profits abroad and lower the percentage of debt financed FDI. This might reflect profit re-allocation to avoid taxes. Market size factors have the expected signs for total FDI. Non-productivity adjusted wages as determinants of FDI are less robust.en_US
dc.language.isoengen_US
dc.relation.ispartofseriesDiscussion paper Series 1 / Volkswirtschaftliches Forschungszentrum der Deutschen Bundesbank 2006,13en_US
dc.subject.jelH8en_US
dc.subject.jelH2en_US
dc.subject.jelF2en_US
dc.subject.jelF3en_US
dc.subject.jelE6en_US
dc.subject.jelF4en_US
dc.subject.ddc330en_US
dc.subject.keywordForeign direct investmenten_US
dc.subject.keywordFDIen_US
dc.subject.keywordcorporate taxesen_US
dc.subject.keywordsample selection modelen_US
dc.subject.keywordprofit re-allocationen_US
dc.subject.stwUnternehmensbesteuerungen_US
dc.subject.stwSteuerwirkungen_US
dc.subject.stwDirektinvestitionen_US
dc.subject.stwGewinnverlagerungen_US
dc.subject.stwEU-Staatenen_US
dc.subject.stwEU-Staaten <Osteuropa>en_US
dc.titleForeign direct investment in the enlarged EU: do taxes matter and to what extent?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn510394078en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
dc.identifier.repecRePEc:zbw:bubdp1:4249-
Appears in Collections:Discussion Paper Series 1: Economic Studies, Deutsche Bundesbank

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