Do Bilateral Tax Treaties Promote Foreign Investment?
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Date
2001-06-01
Authors
Blonigen, Bruce A.
Davies, Ronald B.
Journal Title
Journal ISSN
Volume Title
Publisher
University of Oregon, Dept. of Economics
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.
Description
Keywords
Economics, Tax treaties, Foreign investment