We found a match
Your institution may have rights to this item. Sign in to continue.
- Title
An empiric approach of the FDI-taxation relationship in Romania.
- Authors
TALPOŞ, Ioan; LUDOŞEAN(STOICIU), Bianca Maria
- Abstract
In the heart of the debate on the appropriate level of the profit tax burden on host countries lies a challenging question: How does FDI respond to tax rates? Studies analyzing inter-state fluctuation show that, on average, FDI decreases by 3.7% when corporate tax rates increase by one percentage point, other studies show that the FDI decline varies between 0 and 5%. Such variations reflect differences between nations and industries studied, as well as differences between time periods which have been considered. More recent studies show that FDI becomes increasingly sensitive to tax reflecting a growing mobility of capital as non-tax barriers, previously in the way of FDI, are eliminated (OCDE, 2008). The present article aims to study the effects of tax upon foreign direct investment in Romania. The period studied prolongs on ten years, from 1999 to 2009, with the aim to observe the effects of modifications upon tax revenues, direct tax and indirect tax on foreign investment in Romania. To study the relationship between the variables, econometric modelling has been used thanks to the software package Eviews 5.0. This paper's main conclusion is that foreign direct investment are not discouraged by the level of tax in Romania, on the contrary, they are stimulated by an eventual increase in tax revenue.
- Subjects
TAXATION of foreign investments; INTERNAL revenue; FOREIGN source income; EMERGING markets; FOREIGN tax credit
- Publication
Theoretical & Applied Economics, 2012, Vol 19, Issue 10, p15
- ISSN
1841-8678
- Publication type
Article