Does corporate taxation deter multinationals? Evidence from a historic event in Ireland

Holger Görg and Eric Strobl ()

No 1960, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: We use a unique exogenous corporate tax policy change in the Republic of Ireland to investigate how corporate taxation affects foreign direct investment at the extensive and intensive margin. To this end we construct exhaustive sectoral and plant level panel data and use difference-in-differences strategies. Our results do not provide strong evidence that the increase in corporate tax rates for exporters did affect the entry or exit of plants from the US or UK in Ireland. Entry rates of German firms seem to be negatively affected, however. At the intensive margin there is evidence that foreign plants in Ireland reduce the size of their operations in response to the tax change.

Keywords: multinational companies; foreign direct investment; corporate tax; Ireland; difference-in-differences (search for similar items in EconPapers)
JEL-codes: F23 H25 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Does Corporate Taxation Deter Multinationals? Evidence from a Historic Event in Ireland (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:1960

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