Natural resource revenues and double taxation treaties in developing countries: insights from a network centrality approach

Harouna Kinda () and Abrams Tagem
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Harouna Kinda: UM6P - Université Mohammed VI Polytechnique = Mohammed VI Polytechnic University [Ben Guerir], CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne
Abrams Tagem: UNU - United Nations University

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Abstract: This paper investigates the impact of double taxation treaties (DTTs) on resource revenue mobilization in 91 resource-rich countries from 2000 to 2019. We calculate annual degree centrality indices to measure countries' integration into the tax treaty network. The results of applying panel fixed effects and methods-of-moments approaches indicate a negative relationship between DTT centrality and resource revenue mobilization, which remains robust across government revenue aggregates. Additionally, we employ the betweenness centrality index to identify intermediate jurisdictions—countries classified as investment or tax hubs based on the above-median betweenness centrality. We argue that multinational companies leverage these hubs to minimize tax burdens by exploiting extensive treaty networks. Finally, using entropy balancing, we provide evidence that signing tax treaties with investment or tax hubs adversely affects resource revenue mobilization.

Keywords: centrality indices; double taxation treaties; entropy balancing; resource revenue mobilization; withholding taxes.; Natural resources (search for similar items in EconPapers)
Date: 2024-12-23
Note: View the original document on HAL open archive server: https://cnrs.hal.science/hal-04783961v1
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Published in International Tax and Public Finance, 2024, 32 (4), pp.1253-1287. ⟨10.1007/s10797-024-09870-9⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04783961

DOI: 10.1007/s10797-024-09870-9

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