Tax-Treaty Effects on Foreign Investment: Evidence from European Multinationals

Mário Marques and Carlos Pinho

FinanzArchiv: Public Finance Analysis, 2014, vol. 70, issue 4, 527-555

Abstract: This paper reexamines the effects of bilateral tax treaties on investment location decisions, using a large panel of European countries. It provides evidence that tax treaties induced a positive and significant impact on the number of foreign subsidiaries incorporated in the last decade. Findings also suggest positive effects of treaty features other than withholding tax rates and double-taxation relief methods. When they are analyzed separately, we also find evidence confirming that the host country´s corporate tax rate is a determining factor in the location of foreign subsidiaries.

Keywords: investment location; bilateral tax treaties; effective tax rate; corporate taxation; panel data (search for similar items in EconPapers)
JEL-codes: F23 H25 H32 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:mhr:finarc:urn:sici:0015-2218(201412)70:4_527:teofie_2.0.tx_2-2

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DOI: 10.1628/001522108X685474

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