Asymmetric FDI and tax-treaty bargaining: theory and evidence

Asymmetric FDI and Tax-Treaty Bargaining: Theory and Evidence

Tax treaties are often viewed as a mechanism for eliminating tax competition, however this approach ignores the need for bargaining over the treaty’s terms. This paper focuses on how bargaining can affect the withholding taxes set under the treaty. In a simple framework, we develop hypotheses about patterns in treaty tax rates. A key determinant for these patterns is the relative size of bilate...

Technical Appendix: Transition to FDI Openness - Reconciling Theory and Evidence

* The views expressed herein are those of the authors and not necessarily those of the Federal Reserve Bank of Minneapolis or the Federal Reserve System.

Transition to FDI Openness: Reconciling Theory and Evidence

Empirical studies quantifying the economic effects of increased foreign direct investment (FDI) have not provided conclusive evidence that they are positive, as theory predicts. This paper shows that the lack of empirical evidence is consistent with theory if countries are in transition to FDI openness. Anticipated welfare gains lead to temporary declines in domestic investment and employment. ...

نظام سیاسی و فرهنگ مالیات politic system and tax culture

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Online appendix for: International Treaty Ratification and Party Competition: Theory and Evidence from the EU’s Constitutional Treaty