The role of tax system complexity on foreign direct investment

Alejandro Esteller-Moré, Leonzio Rizzo and Riccardo Secomandi

Applied Economics, 2021, vol. 53, issue 45, 5208-5220

Abstract: We present new cross-country empirical evidence that tax system complexity affects the location of international investment. The evidence comes from a database of foreign direct investment (FDI) bilateral flows for all OECD countries over the 2013–2016 period, and from the Doing Business survey, which collects several measures of tax system complexity and effective tax rates. By means of a gravity model, we consider the impact of destination and parent country characteristics on firm investment decisions. An increase in the difference between tax complexity in the home country and the destination country is related with an increase in FDI outflows from home to destination. We do not find any significant impact of tax rate differentials on FDI outflows.

Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2021.1922587 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:53:y:2021:i:45:p:5208-5220

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2021.1922587

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().