The Impact of the EU Tax Blacklist on Cross-Border Direct Investment

Yan Dong, Ran Ge and Suhang Tan

Emerging Markets Finance and Trade, 2025, vol. 61, issue 12, 3785-3796

Abstract: In this article, we examine how the EU list of noncooperative jurisdictions for tax purposes (LIST) impacts cross-border direct investment (CBDI) by using panel data from 2014 to 2023. Among the results, the LIST significantly reduced the inbound CBDI of listed jurisdictions by 20.86% during the period and with more pronounced effects on tax-motivated transactions. Investments from non-EU countries were affected as well. Our findings suggest the LIST deters noncompliant jurisdictions and redirects investment flows to more compliant tax havens in the EU. In response, policymakers should ensure that the LIST is used to promote good tax governance and not as a punitive instrument.

Date: 2025
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DOI: 10.1080/1540496X.2025.2489747

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