FDI, taxes and agglomeration economies in the EU15

Hansson, Åsa; Olofsdotter, Karin

doi:10.1080/00036846.2012.665596

Cited by 14 publications

(9 citation statements)

References 21 publications

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“…electricity and water supply, roads, airport facilities, labour costs, local knowledge and capabilities, availability of local suppliers) (e.g. Bénassy-Quéré, Fontagné, & Lahréche-Révil, 2005;Endo, 2006;Hansson & Olofsdotter, 2013;Kinda, 2010). Kinda (2010) reports that service sectors are negatively affected by physical infrastructures constraints.…”

Section: Determinant Factors Of Hotel Fdi Attraction Processmentioning

confidence: 99%

“…Bénassy-Quéré et al (2005) in their study about investment-location decisions between 11 OECD countries find that their measure of agglomerationmarket potential, together with taxes is an important determinant of bilateral FDI flows. Finally, Hansson and Olofsdotter (2013) study the impact of tax differentials and agglomeration economies on FDI. The authors use four agglomerations variablesmarket potential, host-country stock of FDI, country's population density and expenditure on research and development (R&D)and find that "the impact of taxes is sensitive to the estimation method and the inclusion of agglomeration economies and there is some evidence of agglomeration mitigating the negative effects of taxes on FDI flows" (Hansson & Olofsdotter, 2013: 2654.…”

Section: Additional Variablesmentioning

confidence: 99%

“…6 We follow previous studies on FDI and we employ a gravity framework (see, e.g. Bénassy-Quéré et al, 2005, Hansson & Olofsdotter, 2013 where inward FDI stock for the French hotel and restaurant industry is determined by standard gravity variables as well as taxes, labour costs and skills, agglomeration economies, country-pair-specific effects and a time dummy (Egger & Pfaffermayr, 2003). Since there was a global financial crisis with devastating effects on investment flows in the analyzed time period -from 2000 to 2017, we include in the model a dummy variable that takes the value of 1 for the years of the financial crisisfrom 2007 to 2010.…”

Section: Additional Variablesmentioning

confidence: 99%

“…The second measure is the differential between total FDI stock in the host-country and the investor country. As stated by Hansson andOlofsdotter (2013: 2655) "is expected that countries with a larger stock of FDI will have an advantage in attracting new investment". Data for total FDI stock are provided by the World Bank.…”

Section: Datamentioning

confidence: 99%

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Foreign Direct Investment in the tourism sector: The case of France

Cró

Martins

2020

Tourism Management Perspectives

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This study investigates the determinants of inward Foreign Direct Investment (FDI) stock in the French hospitality industry. A panel gravity model is applied to bilateral inward FDI stock between France and nineteen investor countries in Hotels and the Restaurant industry over 2000-2017. Results show that bilateral inward FDI stocks between France and investor countries are positively affected by their income and are inversely proportional to the distance between them. It is also found that differentials between France and the investing countries in terms of taxes, labour costs, abundance of skilled labour, supply of public goods and total FDI stock also play a significant role in understanding the foreign location decisions. Finally, the results show that France is particularly successful in attracting FDI in the hospitality industry from French-speaking countries with a common border and cultural proximity to France.

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Section: Determinant Factors Of Hotel Fdi Attraction Processmentioning

confidence: 99%

Section: Additional Variablesmentioning

confidence: 99%

Section: Additional Variablesmentioning

confidence: 99%

Section: Datamentioning

confidence: 99%

See 2 more Smart Citations

Foreign Direct Investment in the tourism sector: The case of France

Cró

Martins

2020

Tourism Management Perspectives

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“…Cluster 1 -in lilac -identifies the relevance of research on location, verticalization and agglomeration decisions (Hubert and Pain, 2002;Hansson and Olofsdotter, 2013;Cen et al, 2017). Cluster 2 -in red -highlights tax decisions influenced by issues of fiscal policy and the macroeconomic ones, in host countries (Coeurdacier et al, 2009;Fuest et al, 2011;.…”

Section: Analysis Of Abstractmentioning

confidence: 99%

The Influence of Taxes on Foreign Direct Investment: Systematic Literature Review and Bibliometric Analysis

Peter¹,

Michele²

2020

ERSJ

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Purpose: The paper proposes a systematic review and bibliometric analysis of the corporate finance literature on tax and multinational investment, since the complexity of legislations and taxation is a challenge to researchers who seek to understand their influence on corporate financing decisions. It presents the most relevant papers about the influence of taxes on corporate capital structure, classifies and codifies the various characteristics of these articles, describes the strengths and weaknesses of the studies and provides an agenda and a research framework to address the key gaps in the current knowledge on the theme. Approach/Methodology/Design: The study classifies 41 selected articles cited in the WoS database. The papers are reviewed and their main contributions are identified. Findings: The results indicate that tax is a determinant for multinational companies. However, the complexity of the legislations implies problems in estimating and the results of these studies. Among the knowledge gaps identified, the estimation problems of the models stand out, due to the difficulty in calculating the tax proxies. The papers present opposite results for the same information bases and research problems, depending on how the tax independent variable is modulated. Practical Implications: The study will contribute positively to the understanding of foreign direct investments, world organizations, multinational companies and investors. Originality/Value: To the best of the authors´ knowledge, this is the first systematic review identifying what is missing in the literature on taxation and capital structure of multinationals, while offering recommendations for future studies.

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Tax havens and transfer pricing strategies: Insights from emerging economies

Fonseca,

Jucá,

Vieito

2024

Thunderbird Intl Bus Rev

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This study examines multinational companies in emerging markets, exploring their transfer pricing strategies for establishing tax havens. These companies employ various mechanisms (e.g., transfer pricing, profit transfers, and the reallocation of intangible assets) to minimize their tax liabilities. Today an increasing level of intangible assets facilitates smoother profit transfers to jurisdictions with lower tax burdens. Furthermore, these companies relocate their productive activities to tax havens, creating opportunities for corporate tax evasion and avoidance. Despite the efforts of governments and international organizations to propose the adoption of a minimum tax rate for different countries, these companies have been able to reduce or completely avoid paying taxes. Our study sample includes companies headquartered in emerging countries between 2010 and 2020. The study introduces some innovative elements, such as the variable “transfer pricing intensity,” which is derived from manual data collection. This variable enables analysis of the transfer pricing levels employed by multinational companies. In addition, a noteworthy contribution of this research is the use of an unconventional tax proxy known as AREA, which monitors the tax benefits associated with short‐ and long‐term debts. The results demonstrate that these companies employ a diverse range of instruments, often in combination, to reduce taxes in their conglomerates. These findings contribute significantly to a deeper understanding of the intricacies surrounding corporate tax optimization practices and provide valuable insights for governments in formulating robust policies that promote transparency and accountability in the international tax landscape.

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FDI, taxes and agglomeration economies in the EU15

Cited by 14 publications

References 21 publications

Foreign Direct Investment in the tourism sector: The case of France

Foreign Direct Investment in the tourism sector: The case of France

The Influence of Taxes on Foreign Direct Investment: Systematic Literature Review and Bibliometric Analysis

Tax havens and transfer pricing strategies: Insights from emerging economies

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