Return to search

The Impact of Corporate Taxes on Foreign Direct Investment

This thesis investigates the impact that the corporate income tax rate has on inflows offoreign direct investment (FDI) in high-income OECD countries during the periods1998-2006. The thesis has a small focus on Sweden and how this country’s policies canaffect inward FDI. Moreover, the determinants of FDI are analyzed in order to build amodel that allows to see the influence that the statutory corporate income tax rate has onthese countries. OLS regressions are used to find the degree to which certain variables,specifically the corporate tax rate, have an impact of the dependent variable (i.e.aggregate inflows of FDI). The independent variables are: GDP, skilled labour, labourcosts, economic freedom as a proxy for trade openness and property rights,infrastructure, the corporate income tax rate, dummy variables to account for timeeffects and three dummy variables for continental location targeting whethergeographical location is of relevance of not.It is concluded that the corporate income tax rate does have a significant impact on FDIinflows in OECD members for the specified period. Additionally, economic freedom,gdp and geographical location are also found to be important variables that determinethe inflows of FDI. Other variables are found insignificant in almost all regressions.

Identiferoai:union.ndltd.org:UPSALLA1/oai:DiVA.org:hj-14367
Date January 2010
CreatorsCover, Yanin
PublisherInternationella Handelshögskolan, Högskolan i Jönköping, IHH, Nationalekonomi
Source SetsDiVA Archive at Upsalla University
LanguageEnglish
Detected LanguageEnglish
TypeStudent thesis, info:eu-repo/semantics/bachelorThesis, text
Formatapplication/pdf
Rightsinfo:eu-repo/semantics/openAccess

Page generated in 0.0015 seconds