 On the appropriate measure of tax burden on foreign direct investment to the CEECsChristian Bellak, Markus Leibrecht and Roman Romisch Applied Economics Letters, 2007, vol. 14, issue 8, 603-606 Abstract: We argue from a conceptual and empirical point of view that tax-rate elasticities of foreign direct investment (FDI) to Central and East European Countries (CEECs) derived from statutory tax rates (STRs) are likely to be flawed. STRs are problematic measures of tax burden as they capture neither tax base effects, nor effects of the home country or international and supranational tax laws. From an empirical point of view STRs are questionable as their behavior over time and between country-pairs may differ from that of the conceptually superior bilateral corporate effective average tax rates (BCEATRs) of the Devereux-Griffith type. The variability of host-country STRs and BCEATRs of seven major home countries of FDI in eight major CEEC host countries is compared via Levene-tests for 1995--2005. Results indicate that using STRs instead of BCEATRs in empirical investigations of FDI is likely to result in tax-rate elasticities which are too low in absolute value. Date: 2007 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:apeclt:v:14:y:2007:i:8:p:603-606 Ordering information: This journal article can be ordered from DOI: 10.1080/13504850500474202 Access Statistics for this article Applied Economics Letters is currently edited by Anita Phillips More articles in Applied Economics Letters from Taylor & Francis Journals |
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