Do Bilateral Tax Treaties Promote Foreign Direct Investment?

Bruce Blonigen and Ronald Davies

No 8834, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We explore the impact of bilateral tax treaties on foreign direct investment using data from OECD countries over the period 1982-1992. We find that recent treaty formation does not promote new investment, contrary to the common expectation. For certain specifications we find that treaty formation may actually reduce investment as predicted by arguments suggesting treaties are intended to reduce tax evasion rather than promote foreign investment.

JEL-codes: F21 F23 (search for similar items in EconPapers)
Date: 2002-03
New Economics Papers: this item is included in nep-ifn
Note: ITI PE
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Citations: View citations in EconPapers (27)

Published as Bruce A. Blonigen & Ronald B. Davies, 2004. "The Effects of Bilateral Tax Treaties on U.S. FDI Activity," International Tax and Public Finance, Springer, vol. 11(5), pages 601-622, 09.
Published as Hartigan, J. (ed.) Handbook of International Trade, Volume II: Economic and Legal Analysis of Laws and Institutions. Oxford, U.K. and Cambridge, MA: Blackwell Publishers, 2005.

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