Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73720
Authors: 
Overesch, Michael
Wamser, Georg
Year of Publication: 
2008
Series/Report no.: 
Ifo Working Paper 59
Abstract: 
This paper investigates whether different types of FDI are asymmetrically affected by corporate taxation. We classify investment projects according to several characteristics such as the general motivation for FDI, the type of business activity, or the degree of internationalization of the multinational. Subsequently, we analyze how local taxes influence the number of German outbound investments in European countries. The analysis reveals significant asymmetries with regard to tax effects: vertically integrated investments are more sensitive to host-country taxation than horizontal FDI; larger taxrate elasticities are estimated if business activities are considered highly mobile; in accordance with profit-shifting arguments, subsidiaries of more internationalized companies are less tax responsive to host taxation.
Subjects: 
FDI
corporate taxation
multinational company
count data
JEL: 
F21
F23
H25
H32
Document Type: 
Working Paper

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