KDI Journal of Economic Policy

  • 제44권3호
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  • Pages.27-48
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  • 2022
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  • 2586-2995(pISSN)
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  • 2586-4130(eISSN)
한국개발연구원 (Korea Development Institute)
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The Impact of Tax Treaties on Foreign Direct Investment: The Evidence Reconsidered

  • LEE, SIWOOK (KDI School of Public Policy) ;
  • KIM, DAEYONG (Division of Development Research, Korea Development Institute)
  • 투고 : 2022.02.21
  • 발행 : 2022.08.31
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초록

This paper reconsiders the empirical evidence of the relationship between tax treaties and FDI using U.S. outbound FDI to 78 countries over the period of 2007-2018. Unlike previous studies, we explicitly consider differences in the tax environments of recipient economies, including their tax-haven status, transfer pricing rules, CFC rules and anti-avoidance regulations, in our estimations. Our results confirm the importance of controlling for country-specific tax environments, especially the tax-haven status and transfer pricing rules. We find that tax treaties positively contribute to FDI inflows in developing countries, while they have no statistically significant impacts on OECD countries. Recently signed tax treaties still foster FDI but less than older ones do. Finally, our results indicate, all other things being equal, that the weaker the transfer pricing regulations, the greater the amount of U.S. direct investment into a non-OECD economy.

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참고문헌

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