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THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT

Yıl 2018, Cilt 40, Sayı 1, 1 - 13, 27.06.2018
https://doi.org/10.14780/muiibd.434909

Öz

Main aim of this paper is to investigate the effect of corporate income tax rates on foreign direct

investment (FDI) in the countries which has flat tax application in the pattern of long-run relationship

of FDI and its determinants which are known as market size, labor cost, trade barrier, growth rate,

openness, trade deficit, and tax rates. For the empirical analysis we use annual data for 1990-2014 for the

countries which have applied flat tax reforms and smaller corporate income tax rates in order to focus

and draw out the effect of tax rate instrument on capital movements in the point of tax competition.

According to panel regression and cointegration results, corporate tax rate has significant and negative

impact on FDI.

Kaynakça

  • BOSKIN, M.J., William G.G. (1987). New Results on the Effects of Tax Policy on the International Location of Investment. The Effects of Taxation on Capital Accumulation, Ed: M. Feldstein, Univ. of Chicago Press, Chicago.
  • CHAKRABARTI, A. (2001). The Determinants of Foreign Direct Investment: Sensitivity Analyses of Cross- Country Regressions, KYKLOS, 54(1): 89–114.
  • DESAI, M.A., Foley, C.F., Hines, J.R. (2004). Foreign Direct Investment in a World of Multiple Taxes, Journal of Public Economics, 88(12): 2727-2744.
  • ENGLE, R.F., Granger, C.W.J. (1987). Co-Integration and Error Correction: Representation, Estimation, and Testing, Econometrica, 55(2): 251-276.
  • ENGLE, R.F., Yoo, B.S. (1987). Forecasting and Testing in Co-integrated Systems, Journal of Econometrics, 35(1): 143-159.
  • FERHATOĞLU, E. (2006). Avrupa’da Düz Oranlı Vergi Sistemi Çalışmaları ve Başarısı, Vergi Dünyası, 25(298): 170-176.
  • GRANGER, C.W.J. (1981). Some Properties of Time Series Data and Their Use in Econometric Model Specification, Journal of Econometrics, 16: 121–130.
  • HALL, R.E., Rabushka, A. (1983). Low Tax, Simple Tax, Flat Tax, McGraw-Hill, New York.
  • HALL, R.E., Rabushka, A. (1985). The Flat Tax, Stanford, Calif., Hoover Institution Press.
  • IM, K.S., Pesaran, M.H., Shin, Y. (2003). Testing for Unit Roots in Heterogeneous Panels, Journal of Econometrics, 115(1): 53–74.
  • JOHANSEN, S. (1988). Statistical Analysis of Cointegration Vectors, Journal of Economics Dynamic and Control, 12(2-3): 231–254.
  • KAO, C. (1999). Spurious Regression and Residual-Based Tests for Cointegration in Panel Data, Journal of Econometrics, 90(1): 1–44.
  • LARSSON, R, Lyhagen J. (1999). Likelihood-Based Inference in Multivariate Panel Cointegration Models, Stockholm School of Economics, Working Paper Series in Economics and Finance, No:331.
  • LARSSON, R, Lyhagen, J., Löthgren, M. (2001). Likelihood-Based Cointegration Tests in Heterogeneous Panels, Econometrics Journal, 4(1): 109-142.
  • LEVIN, A., Lin, C.F., Chu, C.S. (2002). Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties, Journal of Econometrics, 108(1): 1–24.
  • MADDALA, G.S., Wu, S. (1999). A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test, Oxford Bulletin of Economics and Statistics, 61: 631–652.
  • MCCOSKEY, S., Kao, C. (1998). A Residual-Based Test of the Null of Cointegration in Panel Data, Econometric Reviews, 17(1): 57–84.
  • NING, Y., Reed, M.R. (1995). Locational Determinants of U.S. Direct Foreign Investment in Food and Kindered Products, Agrobusiness, 11(1): 77- 85.
  • PAULUS, A., Peichl, A. (2008). Effects of Flat Tax Reforms in Western Europe on Equity and Efficiency, ISER Discussion Paper, 2008-06.
  • PEDRONI, P. (1995). Panel Cointegration; Asymptotic and Finite Sample Properties of Pooled Time Series Tests with an Application to the PPP Hypothesis, Indiana Univ. WP in Economics, No: 95–013.
  • PEDRONI, P. (1999). Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors, Oxford Bulletin of Economics and Statistics, 61(S1): 653–670.
  • PEDRONI, P. (2004). Panel Cointegration: Asymptotic and Finite Sample Properties of Pooled Time Series Tests with an Application to the PPP Hypothesis: New Results, Econometric Theory, 20(3): 597–625.
  • PORCANO, T.M., Price, C.E. (1996). The Effects of Government Tax and Nontax Incentives on Foreign Direct Investment, Multinational Business Review, 4(1): 9-20.
  • SARISOY, İ., Koç, S. (2010). Doğrudan Yabancı Sermaye Yatırımlarının Kurumlar Vergisi Gelirleri Üzerindeki Etkisinin Ekonometrik Analizi, Erciyes Üniversitesi İİBF Dergisi, 36: 133-153.
  • SAYGIN, Ö., (2013). Gelir Vergisi Tarifesinin Esneklik Analizi: Türkiye Üzerine Bir Değerlendirme, Vergi Sorunları Dergisi, 301: 175-186.
  • SWENSON, D.L. (2004). The Impact of U.S. Tax Reform on Foreign Direct Investment in the United States, Journal of Public Economics, 54(2): 243-266.
  • The World Bank, World Development Indicators, http://databank.worldbank.org /data/reports. Erişim Tarihi (31.07.2016)
  • Trading Economics, https://tradingeconomics.com, Erişim Tarihi (31.07.2016)

THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT

Yıl 2018, Cilt 40, Sayı 1, 1 - 13, 27.06.2018
https://doi.org/10.14780/muiibd.434909

Öz

Main aim of this paper is to investigate the effect of corporate income tax rates on foreign direct

investment (FDI) in the countries which has flat tax application in the pattern of long-run relationship

of FDI and its determinants which are known as market size, labor cost, trade barrier, growth rate,

openness, trade deficit, and tax rates. For the empirical analysis we use annual data for 1990-2014 for the

countries which have applied flat tax reforms and smaller corporate income tax rates in order to focus

and draw out the effect of tax rate instrument on capital movements in the point of tax competition.

According to panel regression and cointegration results, corporate tax rate has significant and negative

impact on FDI.

Kaynakça

  • BOSKIN, M.J., William G.G. (1987). New Results on the Effects of Tax Policy on the International Location of Investment. The Effects of Taxation on Capital Accumulation, Ed: M. Feldstein, Univ. of Chicago Press, Chicago.
  • CHAKRABARTI, A. (2001). The Determinants of Foreign Direct Investment: Sensitivity Analyses of Cross- Country Regressions, KYKLOS, 54(1): 89–114.
  • DESAI, M.A., Foley, C.F., Hines, J.R. (2004). Foreign Direct Investment in a World of Multiple Taxes, Journal of Public Economics, 88(12): 2727-2744.
  • ENGLE, R.F., Granger, C.W.J. (1987). Co-Integration and Error Correction: Representation, Estimation, and Testing, Econometrica, 55(2): 251-276.
  • ENGLE, R.F., Yoo, B.S. (1987). Forecasting and Testing in Co-integrated Systems, Journal of Econometrics, 35(1): 143-159.
  • FERHATOĞLU, E. (2006). Avrupa’da Düz Oranlı Vergi Sistemi Çalışmaları ve Başarısı, Vergi Dünyası, 25(298): 170-176.
  • GRANGER, C.W.J. (1981). Some Properties of Time Series Data and Their Use in Econometric Model Specification, Journal of Econometrics, 16: 121–130.
  • HALL, R.E., Rabushka, A. (1983). Low Tax, Simple Tax, Flat Tax, McGraw-Hill, New York.
  • HALL, R.E., Rabushka, A. (1985). The Flat Tax, Stanford, Calif., Hoover Institution Press.
  • IM, K.S., Pesaran, M.H., Shin, Y. (2003). Testing for Unit Roots in Heterogeneous Panels, Journal of Econometrics, 115(1): 53–74.
  • JOHANSEN, S. (1988). Statistical Analysis of Cointegration Vectors, Journal of Economics Dynamic and Control, 12(2-3): 231–254.
  • KAO, C. (1999). Spurious Regression and Residual-Based Tests for Cointegration in Panel Data, Journal of Econometrics, 90(1): 1–44.
  • LARSSON, R, Lyhagen J. (1999). Likelihood-Based Inference in Multivariate Panel Cointegration Models, Stockholm School of Economics, Working Paper Series in Economics and Finance, No:331.
  • LARSSON, R, Lyhagen, J., Löthgren, M. (2001). Likelihood-Based Cointegration Tests in Heterogeneous Panels, Econometrics Journal, 4(1): 109-142.
  • LEVIN, A., Lin, C.F., Chu, C.S. (2002). Unit Root Tests in Panel Data: Asymptotic and Finite-Sample Properties, Journal of Econometrics, 108(1): 1–24.
  • MADDALA, G.S., Wu, S. (1999). A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test, Oxford Bulletin of Economics and Statistics, 61: 631–652.
  • MCCOSKEY, S., Kao, C. (1998). A Residual-Based Test of the Null of Cointegration in Panel Data, Econometric Reviews, 17(1): 57–84.
  • NING, Y., Reed, M.R. (1995). Locational Determinants of U.S. Direct Foreign Investment in Food and Kindered Products, Agrobusiness, 11(1): 77- 85.
  • PAULUS, A., Peichl, A. (2008). Effects of Flat Tax Reforms in Western Europe on Equity and Efficiency, ISER Discussion Paper, 2008-06.
  • PEDRONI, P. (1995). Panel Cointegration; Asymptotic and Finite Sample Properties of Pooled Time Series Tests with an Application to the PPP Hypothesis, Indiana Univ. WP in Economics, No: 95–013.
  • PEDRONI, P. (1999). Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors, Oxford Bulletin of Economics and Statistics, 61(S1): 653–670.
  • PEDRONI, P. (2004). Panel Cointegration: Asymptotic and Finite Sample Properties of Pooled Time Series Tests with an Application to the PPP Hypothesis: New Results, Econometric Theory, 20(3): 597–625.
  • PORCANO, T.M., Price, C.E. (1996). The Effects of Government Tax and Nontax Incentives on Foreign Direct Investment, Multinational Business Review, 4(1): 9-20.
  • SARISOY, İ., Koç, S. (2010). Doğrudan Yabancı Sermaye Yatırımlarının Kurumlar Vergisi Gelirleri Üzerindeki Etkisinin Ekonometrik Analizi, Erciyes Üniversitesi İİBF Dergisi, 36: 133-153.
  • SAYGIN, Ö., (2013). Gelir Vergisi Tarifesinin Esneklik Analizi: Türkiye Üzerine Bir Değerlendirme, Vergi Sorunları Dergisi, 301: 175-186.
  • SWENSON, D.L. (2004). The Impact of U.S. Tax Reform on Foreign Direct Investment in the United States, Journal of Public Economics, 54(2): 243-266.
  • The World Bank, World Development Indicators, http://databank.worldbank.org /data/reports. Erişim Tarihi (31.07.2016)
  • Trading Economics, https://tradingeconomics.com, Erişim Tarihi (31.07.2016)

Ayrıntılar

Birincil Dil İngilizce
Konular İktisat
Bölüm Makaleler
Yazarlar

Berna HIZARCI BEŞER> (Sorumlu Yazar)


Mustafa Kemal BEŞER>

0000-0002-9988-1965

Yayımlanma Tarihi 27 Haziran 2018
Yayınlandığı Sayı Yıl 2018, Cilt 40, Sayı 1

Kaynak Göster

Bibtex @araştırma makalesi { muiibd434909, journal = {Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi}, issn = {2587-2672}, address = {}, publisher = {Marmara Üniversitesi}, year = {2018}, volume = {40}, number = {1}, pages = {1 - 13}, doi = {10.14780/muiibd.434909}, title = {THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT}, key = {cite}, author = {Hızarcı Beşer, Berna and Beşer, Mustafa Kemal} }
APA Hızarcı Beşer, B. & Beşer, M. K. (2018). THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT . Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi , 40 (1) , 1-13 . DOI: 10.14780/muiibd.434909
MLA Hızarcı Beşer, B. , Beşer, M. K. "THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT" . Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi 40 (2018 ): 1-13 <https://dergipark.org.tr/tr/pub/muiibd/issue/37649/434909>
Chicago Hızarcı Beşer, B. , Beşer, M. K. "THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT". Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi 40 (2018 ): 1-13
RIS TY - JOUR T1 - THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT AU - BernaHızarcı Beşer, Mustafa KemalBeşer Y1 - 2018 PY - 2018 N1 - doi: 10.14780/muiibd.434909 DO - 10.14780/muiibd.434909 T2 - Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi JF - Journal JO - JOR SP - 1 EP - 13 VL - 40 IS - 1 SN - 2587-2672- M3 - doi: 10.14780/muiibd.434909 UR - https://doi.org/10.14780/muiibd.434909 Y2 - 2022 ER -
EndNote %0 Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT %A Berna Hızarcı Beşer , Mustafa Kemal Beşer %T THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT %D 2018 %J Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi %P 2587-2672- %V 40 %N 1 %R doi: 10.14780/muiibd.434909 %U 10.14780/muiibd.434909
ISNAD Hızarcı Beşer, Berna , Beşer, Mustafa Kemal . "THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT". Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi 40 / 1 (Haziran 2018): 1-13 . https://doi.org/10.14780/muiibd.434909
AMA Hızarcı Beşer B. , Beşer M. K. THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi. 2018; 40(1): 1-13.
Vancouver Hızarcı Beşer B. , Beşer M. K. THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT. Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi. 2018; 40(1): 1-13.
IEEE B. Hızarcı Beşer ve M. K. Beşer , "THE IMPACT OF FLAT TAX RATES ON FOREIGN DIRECT INVESTMENT", Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, c. 40, sayı. 1, ss. 1-13, Haz. 2018, doi:10.14780/muiibd.434909