Tax competition and factors influencing the gross domestic product and foreign direct investments of CEE countries

Dragos Paun

Economic Research-Ekonomska Istraživanja, 2019, vol. 32, issue 1, 876-893

Abstract: In the beginning of the twenty-first century, governments have tried to attract companies by offering different tax incentives or even changing their entire tax regime. Among the countries that have attracted foreign investments we have countries in Eastern Europe which enjoyed the benefits of the Single European Market and the stability that an EU membership brings. Given the importance of foreign capital we focus our paper on the factors the impact FDI and GDP. The main objective of the paper was to assess the impact of taxation on the GDP and FDI but our analysis has allowed to also view the impact of other factors such as infrastructure, unemployment, cost of doing business and labour force. We have selected 11 countries of the 13 New Member States that have joined the EU after 2004 and looked at data for the years 2005–2015. To see which factors influence the GDP and FDI, we have used the method of panel least squares. The results of our analysis show that taxation does play a role in the increase of the GDP and the attraction of FDI. Nevertheless, it is not the main factor and countries should not only rely on reduction of fiscal pressure.

Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/1331677X.2019.1585896 (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:reroxx:v:32:y:2019:i:1:p:876-893

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rero20

DOI: 10.1080/1331677X.2019.1585896

Access Statistics for this article

Economic Research-Ekonomska Istraživanja is currently edited by Marinko Skare

More articles in Economic Research-Ekonomska Istraživanja from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().