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The Strathprints institutional repository is a digital archive of University of Strathclyde research outputs. Strathprints provides access to thousands of Open Access research papers by University of Strathclyde researchers, including those from the School of Psychological Sciences & Health - but also papers by researchers based within the Faculties of Science, Engineering, Humanities & Social Sciences, and from the Strathclyde Business School.

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Do tax sparing agreements contribute to the attraction of FDI in developing countries?

Celine, A. and Desbordes, R. and Mucchielli, J. (2007) Do tax sparing agreements contribute to the attraction of FDI in developing countries? International Tax and Public Finance, 14 (5). pp. 543-562. ISSN 0927-5940

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Abstract

Measuring the effects of taxation on FDI in developing countries requires consideration of the tax sparing provision. This provision signed between developed and developing countries protects host country fiscal incentives for FDI. This paper estimates the impact of tax sparing provisions on Japanese outbound FDI between 1989 and 2000. We find evidence that the tax sparing provision influences positively the location of Japanese FDI, even after having taken into account reversal causality.