Do low corporate income tax rates attract FDI? – Evidence from Central- and East European countries

Bellak, Christian; Leibrecht, Markus

doi:10.1080/00036840701320217

Cited by 100 publications

(67 citation statements)

References 21 publications

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“…Benassy-Quere et al (2005) analyzes the effect of the statutory corporate tax rate on FDI and finds evidence for (imperfect) competition in a panel of eleven OECD countries. Bellak and Leibrecht (2009) provide similar evidence for a panel of Central-and Eastern-European countries. Wolff (2007), too, finds evidence for a significant effect of taxes on FDI.…”

Section: The Empirical Evidencesupporting

confidence: 52%

The Economics and Empirics of Tax Competition: A Survey

Baskaran

Fonseca

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may THE ECONOMICS AND EMPIRICS OF TAX COMPETITION: A SURVEY Thushyanthan Baskaran Mariana Lopes da FonsecaThe economics and empirics of tax competition: a surveyThushyanthan Baskaran * † , and Mariana Lopes da Fonseca † † † University of Göttingen, thushyanthan.baskaran@uni-goettingen.de † † University of Göttingen, mariana.da-fonseca@wiwi.uni-goettingen.de AbstractWe survey the theoretical and empirical literature on local and international tax competition in Economics. Based on this survey, we discuss whether EU countries should harmonize tax policies to prevent a "race to the bottom". Much of the evidence suggests that tax competition does not lead to significant reductions in tax revenues. Therefore, we conclude that tax coordination is in all likelihood unnecessary to prevent inefficiently low levels of taxation in the EU. But since the evidence against adverse effects of tax competition is not unambiguous, we also discuss whether intergovernmental transfers might be a less invasive means than outright tax harmonization to prevent a race to the bottom.

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Section: The Empirical Evidencesupporting

confidence: 52%

The Economics and Empirics of Tax Competition: A Survey

Baskaran

Fonseca

2013

SSRN Journal

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“…However, the transition also created negative pressures on tax and spending decisions. In an effort to attract Foreign Direct Investment, the Central and Eastern European Countries (CEECs) cut corporate income tax rates (Bellak and Leibrecht, 2009) or introduced flat rate personal income taxes (Keen et al, 2008). Finally the presence of a large informal economy led many governments to lower tax rates to encourage formalization (Duman, 2010).…”

Section: Introductionmentioning

confidence: 99%

The Effect of Globalization on the Distribution of Taxes and Social Expenditures in Europe: Do Welfare State Regimes Matter?

Onaran

Boesch

2014

Environ Plan A

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Europe. It tests the coexistence of efficiency and compensation effects of globalization on the expenditure as well as the revenue sides of government budgets. In Western Europe, globalization leads to an increase in social expenditures; however these expenditures are to an increasing extent financed by taxes on labor income. There is no effect of the ITR on capital income, whereas the ITR on consumption decreases. There are important differences between the welfare states. In the conservative regimes, social expenditures increase due to globalization, but they are financed to an increasing extent by taxes on labor. In the social democratic regimes, not only social expenditures, but also the ITRs on capital income and consumption decrease as a result of globalization, whereas the ITR on labor income increases. In the liberal regimes, the ITR on labor income is rising, while social expenditures and the ITR on consumption is declining. In the southern regimes, the ITRs on both capital income and consumption are decreasing. In the CEE NMS, on average, there seems to be no statistically significant effect of globalization on social expenditures nor on the ITR on capital and labor income. Globalization affects only the ITR on consumption, leading to a decline. However, different welfare regimes react differently: there is a negative effect of globalization on social spending in the Baltic countries, and a negative effect on the ITR on capital income in the post-communist European regimes.

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“…Bellak and Leibrecht (2009)), the introduction of flat-rate personal income taxes (e.g. Keen et al (2006)) or the creation of special economic zones (e.g.…”

Section: Introductionmentioning

confidence: 99%