Tax incentives and the location of FDI: Evidence from a panel of German multinationals
Thiess Buettner () and
Authors registered in the RePEc Author Service: Thiess Büttner ()
International Tax and Public Finance, 2007, vol. 14, issue 2, 151-164
Using a firm-level panel data set this paper investigates the impact of taxation on the decision of German multinationals to hold or establish a subsidiary in other European countries or abroad. Taking account of unobserved local characteristics as well as firm-specific preferences for potential locations, the results confirm significant effects of tax incentives, market size, and of labor cost on cross-border location decisions. In accordance with Devereux and Griffith (1998) we find that the marginal effective tax rate has no predictive power for location decisions. However, the results indicate a considerably weaker predictive power of the effective average tax rate as compared to the statutory tax rate. Copyright Springer Science + Business Media, LLC 2007
Keywords: Location; FDI; Corporate taxation; Firm-level data; Fixed-effects logit (search for similar items in EconPapers)
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Working Paper: Tax incentives and the location of FDI: evidence from a panel of German multinationals (2005)
Working Paper: Tax Incentives and the Location of FDI: Evidence from a Panel of German Multinationals (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:itaxpf:v:14:y:2007:i:2:p:151-164
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