TITLE

Bilateral tax treaties and US foreign direct investment financing modes

AUTHOR(S)
Daniels, Joseph; O'Brien, Patrick; Ruhr, Marc
PUB. DATE
December 2015
SOURCE
International Tax & Public Finance;Dec2015, Vol. 22 Issue 6, p999
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
Though it is often claimed that bilateral tax treaties promote foreign direct investment (FDI), previous empirical studies do not support this view. Indeed, the literature provides mixed results where bilateral tax treaties have a positive impact on FDI flows in some studies and a negative impact in other studies. Using US FDI outflows disaggregated into financing modes, equity capital, reinvested earnings, and inter-company debt, we estimate fixed-effects quantile regression models that include controls for new tax treaties, existing treaties (in place prior to the start of the sample period), and the total number of tax treaties a host country has in effect. Results, in general, indicate that both new and existing US bilateral tax treaties are associated with lower FDI outflows to the host country, while the total number of treaties a host country has in place is associated with greater US FDI outflows to the host country. These results also hold for reinvested earnings flows and equity capital flows. For debt flows, however, existing treaties are associated with greater flows, while new treaties and the total number of host treaties show no consistent statistically significant effect.
ACCESSION #
110071154

 

Related Articles

  • The Regulation of Tax Matters in Bilateral Investment Treaties: A Dispute Resolution Perspective. de Melo Vieira, MaĆ­ra // Dispute Resolution International;May2014, Vol. 8 Issue 1, p63 

    The article discusses the dispute resolution perspective for regulations of tax matters in bilateral investment treaties. It mentions different parameters to present similarities and differences between international investment treaties and tax treaties including scope and objectives, National...

  • Competing for Scarce Foreign Capital: Spatial Dependence in the Diffusion of Double Taxation Treaties. BARTHEL, FABIAN; NEUMAYER, ERIC // International Studies Quarterly;Dec2012, Vol. 56 Issue 4, p645 

    Recent research suggests that double taxation treaties (DTTs) increase bilateral foreign direct investment (FDI). However, entering such a tax treaty is not unambiguously favorable for both partners if their bilateral FDI positions are asymmetric. Due to the usual bias toward residence-based...

  • Estimation of structural gravity quantile regression models. Baltagi, Badi; Egger, Peter // Empirical Economics;Feb2016, Vol. 50 Issue 1, p5 

    This paper demonstrates that observable trade cost measures in logs are not linearly related to the overall log trade costs nor to the conditional mean of log bilateral trade flows. This is shown using a simultaneous quantiles regression model and data on bilateral exports in 2008. This is...

  • Errata.  // Economic & Political Weekly;7/12/2014, Vol. 49 Issue 28, p5 

    A correction to the article "Dispute Settlement in Bilateral Investment Agreements: Whither India?" in the July 12, 2014 issue is presented.

  • Base erosion and profit shifting: treaty aspects. Cimetta, Claudio // Tax Specialist (1329-1203);Apr2014, Vol. 17 Issue 4, p146 

    The OECD has concerns that bilateral tax treaties often fail to prevent double non-taxation that results from interactions among more than two countries. The OECD's base erosion and profit shifting (BEPS) project is intended to address these concerns. The project relates to instances where the...

  • UNILATERAL RESPONSES TO TAX TREATY ABUSE: A FUNCTIONAL APPROACH. Marian, Omri // Brooklyn Journal of International Law;2016, Vol. 41 Issue 3, p1157 

    The article reports on the Bilateral tax treaties and functional approach to unilateral responses to tax treaty abuse. topics discussed include resistance to treaty termination, different types of unilateral responses available to treaty abuse, and U.S. geographical breadth and substantive...

  • Mitigating risk.  // Lawyer;3/31/2014, Vol. 28 Issue 14, p35 

    The article discusses a report which claims that structuring investments into the Democratic Republic of Congo (DRC) through Belgium may help to mitigate risk and capitalise on bilateral treaties and double taxation agreements as of March 2014. The DRC's reported need for infrastructure is...

  • THE FIRM.  // Journal of Business Forecasting;Fall2010, Vol. 29 Issue 3, p47 

    The article highlights the findings of the 2010 Consensus in the U.S. which revealed the continuous growth of non-residential investment spending in the country.

  • Foreign Investment Climate.  // United States Country Review;2009, p318 

    The article provides an overview of the foreign investment climate in the U.S.

Share

Read the Article

Courtesy of THE LIBRARY OF VIRGINIA

Sorry, but this item is not currently available from your library.

Try another library?
Sign out of this library

Other Topics