Foreign ownership and corporate income taxation: an empirical evaluation

Harry Huizinga and Gaëtan Nicodème

No 185, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: Economic integration in Europe has not led to a ‘race to the bottom' regarding corporate income taxes. This paper documents trends in the foreign ownership of companies in Europe and it examines whether foreign ownership has exerted a positive influence on corporate income tax levels. Using company-level data, we document that the foreign ownership share in Europe stood at around 21.5 percent in the year 2000. The estimation suggests that a one percentage point increase in foreign ownership increases the average corporate income tax rate between a half and one percent. Further international economic integration is likely to lead to higher foreign ownership shares with a concomitant positive influence on corporate taxation levels.

Keywords: foreign ownership; corporate taxation; taxation; tax competition; Huizinga; Nicodème (search for similar items in EconPapers)
Pages: 50 pages
Date: 2003-06
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Foreign ownership and corporate income taxation: An empirical evaluation (2006)
Working Paper: Foreign Ownership and Corporate Income Taxation: An Empirical Evaluation (2003)
Working Paper: Foreign Ownership and Corporate Income Taxation: An Empirical Evaluation (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0185

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