Foreign direct investment, tax competition and social expenditure

Holger Goerg; Hassan Molana; Catia Montagna

doi:10.1016/j.iref.2008.02.009

Foreign direct investment, tax competition and social expenditure

Holger Goerg, Hassan Molana, Catia Montagna

Research output: Contribution to journal › Article › peer-review

22 Citations (Scopus)

Abstract

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. (C) 2008 Elsevier Inc. All rights reserved.

Original language	English
Pages (from-to)	31-37
Number of pages	7
Journal	International Review of Economics and Finance (IREF)
Volume	18
Issue number	1
DOIs	https://doi.org/10.1016/j.iref.2008.02.009
Publication status	Published - 2009

Keywords

Foreign direct investment
Tax competition
Social policy
TAXATION

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.iref.2008.02.009

Cite this

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abstract = "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. (C) 2008 Elsevier Inc. All rights reserved.",

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AB - 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. (C) 2008 Elsevier Inc. All rights reserved.

KW - Foreign direct investment

KW - Tax competition

KW - Social policy

KW - TAXATION

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DO - 10.1016/j.iref.2008.02.009

M3 - Article

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JO - International Review of Economics and Finance (IREF)

JF - International Review of Economics and Finance (IREF)

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Foreign direct investment, tax competition and social expenditure

Abstract

Keywords

UN SDGs

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Cite this