Foreign direct investment, tax competition and social expenditure

H. Görg, H. Molana, C. Montagna

    Research output: Working paperDiscussion paper

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    The aim of this paper is to make a first step towards studying the role of social expenditure and its interaction with corporate taxation in determining the destination of foreign direct investment (FDI) flows. Using panel data for 18 OECD countries and measuring the extent of social welfare policies by the (public social expenditure)/GDP ratio, we find strong support for the conjecture that redistributive social welfare state policies are valued by multinationals as, for instance, they may signal a government’s commitment to social stability.
    Original languageEnglish
    PublisherUniversity of Dundee
    Publication statusPublished - 2007

    Publication series

    NameDundee Discussion Papers in Economics
    PublisherUniversity of Dundee
    ISSN (Print)1473-236X


    • Foreign direct investment
    • Tax competition
    • Social policy

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