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THE EFFECT OF CORPORATE TAX REVENUES ON DIRECT FOREIGN INVESTMENTS IN OECD COUNTRIES

Year 2020, Issue: 2020 Sonbahar Özel Sayı I/II, 30 - 37, 24.10.2020

Abstract

The importance of foreign capital investments has increased in developed and developing countries due to the positive effect of foreign capital on economic development. Countries need capital transfer in order to have a voice in international trade and increase their competitiveness. One of the most important determinants of foreign capital investments entering a country is tax rates. Countries whose main goal is economic development should adopt tax policies to increase their capital inflows. In order to examine the effect of tax policies adopted, this study analyzes the effects of corporate tax rates on foreign direct investments (FDI). Dynamic panel data analysis was used with the Generalized Moments Method (GMM) developed by Arellano-Bond for the estimation of variance and autocorrelated flexibility for 36 OECD countries in the study covering the years 2000-2016. By choosing which variables to use from the literature, the data were compiled using different sources. FDI flows and some macroeconomic variables were obtained from the World Bank and dataOECD, and tax rates from OECD.Stat. Heteroscedasticity and autocorrelation problems in predictions are solved by Arellano-Bond method. According to the results of the analysis made by installing two models with and without tax; It has been determined that the increase in corporate tax rates reduces foreign direct investment inflows. This result was found statistically significant and appropriate to the literature. As a result of empirical implementation, the importance of countries to pay attention to tax policies to increase FDI inflows and also to develop policies by considering other factors affecting FDI.

References

  • Abdioğlu, N., Biniş, M. ve Arslan, M. (2016), “The effect of corporate tax rate on foreign direct investment: A panel study for oecd countries”, Ege Akademik Bakış Dergisi, 16(4), s. 599-610.
  • Agostinıi C. (2007), “The Impact of State Corporate Taxes on FDI Location”, Public Finance Review, 35 (3), s. 335-360.
  • Alam, A., ve Zulfiqar Ali Shah, S. (2013), “Determinants of foreign direct investment in OECD member countries”, Journal of Economic Studies, 40(4), s. 515-527.
  • Arellano, M., ve Bond, S. (1991). “Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations”, Review of Economic Studies, 58, s. 277-297.
  • Baltagi, H. B. (2005), Econometric Analysis of Panel Data, New York: John Wiley& Sons.
  • Bellak, C., Leibrecht, M. ve Riedl, A. (2008), “Labour costs and FDI flows into central and eastern european countries: A survey of the literature and empirical evidence”, Structural Change and Economic Dynamics, 19(1), s. 17-37.
  • Chakrabartı, A. (2001), “The Determinants of Foreign Direct Investments: Sensitivity Analyses of Cross-Country Regressions”, Kyklos, 54(1), s. 89-114.
  • Çak, M., ve Karakaş, M. (2009), “Doğrudan Yabancı Sermaye Yatırımlarını Belirleyen Unsurlar ve Etkileri”, Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, 26(1), s. 43-54.
  • Çinko, L. (2009). “Doğrudan Yabancı Sermaye Hareketlerinin Makroekonomik Etkileri”, Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, 26(1), s. 117-131.
  • Data Oecd, https://data.oecd.org/ (Erişim tarihi:18.11.2019).
  • De Mooıj, R. A. ve Ederveen, S. (2008), “Corporate tax elasticities: A reader’s guide to empirical findings”, Oxford Review of Economic Policy, 24(4), s. 680–697.
  • De Mooıj, R.A. ve Ederveen, S. (2005), “Explaining the Variation in Empirical Estimates of Tax Elasticities of Foreign Direct Investment”, Tinbergen Institute Discussion Paper, No. 2005-108/3.
  • Devereux, M. P. ve Freeman, H. (1995), “The impact of tax on foreign direct investment: empirical evidence and the implications for tax integration schemes”, International Tax and Public Finance, 2(1), s. 85-106.
  • Diamond, J., Zodrow G. ve Carroll, R. (2013). “Macroeconomic Effects of Lower Corporate Income Tax Rates Recently Enacted Abroad”, Ernst & Young, March.
  • Djankov, S., Ganser, T., McLiesh, C., Ramalho, R., ve Shleifer, A. (2010). “The effect of corporate taxes on investment and entrepreneurship”, American Economic Journal: Macroeconomics, 2(3), s.31-64.
  • Drukker, D. M. (2003). “Testing for serial correlation in linear panel-data models”, The Stata Journal, (3)2, s. 1-10.
  • Dünya Bankasi, https://databank.worldbank.org/source/world-development-indicators (Erişim tarihi:18.11.2019).
  • Greene, W. (2000), Econometric Analysis, New York:Prentice-Hall.
  • Gropp, M. R. ve Kostial, M. K. (2000), “The disappearing tax base: is foreign direct investment (FDI) eroding corporate income taxes?”, European Central Bank Working Paper Series, No:31, s. 1-35.
  • Hartman, D.G. (1985), “Tax Policy and Foreign Direct Investment”, Journal of Public Economics, 26 (1), s. 107-121.
  • Hausman, J. A. (1978). “Specification tests in econometrics”, Econometrica, 46, s. 1251–1271.
  • Hines, Jr. (1999). “Lessons from behavioral responses to international taxation”, National Tax Journal, 52(2), s. 305–322.
  • Hunady, J. ve Orviska, M. (2014). “Determinants of Foreign Direct Investment in EU Countries–Do Corporate Taxes Really Matter?”, Procedia Economics and Finance, 12, s. 243-250.
  • Janicki, H. P., ve Wunnava, P. V. (2004). “Determinants of foreign direct investment: empirical evidence from EU accession candidates”, Applied economics, 36(5), s. 505-509.
  • Kubicova, J., (2013), “The Role of Corporate Income Tax in Foreign Direct Investment Inflows into the “Old” and “New” EU Member States”, Research Project VEGA, 1(0238), s. 222-233.
  • Leitao, N.C. ve Faustino, H., C. (2010), “Determinants of Foreign Direct Investment in Portugal”, Journal of Applied Business and Economics, 11(3), s. 19-26.
  • Mohamed, S. E. ve Sidiropoulos, M. G. (2010), “Another look at the determinants of foreign direct investment in MENA countries: an empirical investigation”, Journal of Economic Development, 35(2), s. 75-95
  • Morisset, J. ve Pirnia, N. (1999), “How Tax Policy and Incentives Affect Foreign Direct Investment: A Review”, World Bank Policy Research Working Paper, No. 2509.
  • Oecd Statistics, https://stats.oecd.org/ (erişim tarihi:18.11.2019).
  • Olıveıra, J. P. T. L. (2017). “Foreign Direct Investment according to different countries' stages of Human Development”, Universidade do Porto - Faculdade de Economia do Porto.
  • Pantelıdıs, P. ve Paneta, E. (2016). “Determinants of inward foreign direct investment in Greece”, Journal of Economics, Business and Management, 4(5), s. 367-371.
  • Quazı, R., (2007). “Economic Freedom and Foreign Direct Investment in East Asia”, Journal of the Asia Pacific Economy, 12 (3), s. 329-344.
  • Sato, T. (2012). “Empirical Analysis of Corporate Tax and Corporate Tax and Foreign Direct Investment”, Public Policy Review, 8 (1), s. 1-20.
  • Shahzad, N. ve Zahid M. (2011) “The Determinants of Foreign Direct Investment in Pakistan”, Abasyn Journal of Social Sciences, 5(1), s. 111-121.
  • Slemrod, J. B. (1990). “Tax effects on foreign direct investment in the United States: Evidence from a cross-country comparison”, In Taxation in the Global Economy, University of Chicago Press, s.. 79-122.
  • Sudsawasd, S. (2008). “Taxation, business regulation, and foreign direct investment in East Asia”, Deepening economic integration, The ASEAN economic community and beyond. Chiba IDE-JETRO: ERIA Research Project Report, s. 239-265.
  • Talpos, I. ve Vancu, I. (2009). “Corporate Income Taxation Effects on Investment Decisions in The European Union”, Annales Universitatis Apulensis Series Economic, 11(1) s. 513-518.
  • Wheeler, D. ve Mody, A. (1992). “International Investment Location Decisions: The Case of U.S. firms”, Journal of International Economics, 33(1-2), s. 57-76.
  • Wooldridge, J. M. (2002). Econometric Analysis of Cross Section and Panel Data. Cambridge, Massachusetts:The MIT Press.
  • Yerdelen Tatoğlu, F. (2018), İleri Panel Veri Analizi Stata Uygulamalı, Beta Basım Yayım, Düzenlenmiş ve Yenilenmiş 3. Baskı: İstanbul.

OECD ÜLKELERİNDE KURUMLAR VERGİSİ ORANLARININ DOĞRUDAN YABANCI YATIRIMLAR ÜZERİNE ETKİSİ

Year 2020, Issue: 2020 Sonbahar Özel Sayı I/II, 30 - 37, 24.10.2020

Abstract

Gelişmiş ve gelişmekte olan ülkelerde yabancı sermayenin ekonomik kalkınmaya olumlu etkisi sebebiyle yabancı sermaye yatırımlarının önemi artmıştır. Ülkeler uluslararası ticarette söz sahibi olmak ve rekabet güçlerini artırmak amacıyla sermaye transferine ihtiyaç duymaktadır. Bir ülkeye giren yabancı sermaye yatırımlarının en önemli belirleyicilerinden biri vergi oranlarıdır. Temel hedeflerinden biri ekonomik kalkınma olan ülkeler sermaye girişlerini arttırmaya yönelik vergi politikaları benimsemelidir. Benimsenen vergi politikalarının etkisinin incelenmesi amacıyla bu çalışmada kurumlar vergisi oranlarının doğrudan yabancı yatırımlara (DYY) etkileri analiz edilmektedir. 2000-2016 yıllarını kapsayan çalışmada 36 OECD ülkesi için değişen varyans ve otokorelasyondan arındırılmış esneklik tahmini için Arellano-Bond’un geliştirdiği Genelleştirilmiş Momentler Metodu (GMM) ile dinamik panel veri analizi kullanılmıştır. Literatürden hangi değişkenlerin kullanılacağı seçilerek, veriler farklı kaynaklar kullanılarak derlenmiştir. DYY akışları ve bazı makroekonomik değişkenler Dünya Bankası’ndan ve dataOECD’den , vergi oranları ise OECD.Stat’dan elde edilmiştir. Tahminlerdeki değişen varyans ve otokorelasyon sorunları Arellano-Bond yöntemi vasıtasıyla giderilmiştir. Vergili ve vergisiz iki model kurularak yapılan analiz sonucuna göre; kurumlar vergisi oranlarının artması doğrudan yabancı yatırım girişlerini azalttığı tespit edilmiştir. Bu sonuç istatistiksel olarak anlamlı ve literatüre uygun bulunmuştur. Ampirik uygulama sonucunda, ülkelerin DYY girişlerini arttırmaya yönelik vergi politikalarına önem vermeleri ve bunun yanısıra DYY’yi etkileyen diğer faktörleri de dikkate alarak politikalar geliştirmeleri gerekliliği ön plana çıkmaktadır.

References

  • Abdioğlu, N., Biniş, M. ve Arslan, M. (2016), “The effect of corporate tax rate on foreign direct investment: A panel study for oecd countries”, Ege Akademik Bakış Dergisi, 16(4), s. 599-610.
  • Agostinıi C. (2007), “The Impact of State Corporate Taxes on FDI Location”, Public Finance Review, 35 (3), s. 335-360.
  • Alam, A., ve Zulfiqar Ali Shah, S. (2013), “Determinants of foreign direct investment in OECD member countries”, Journal of Economic Studies, 40(4), s. 515-527.
  • Arellano, M., ve Bond, S. (1991). “Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations”, Review of Economic Studies, 58, s. 277-297.
  • Baltagi, H. B. (2005), Econometric Analysis of Panel Data, New York: John Wiley& Sons.
  • Bellak, C., Leibrecht, M. ve Riedl, A. (2008), “Labour costs and FDI flows into central and eastern european countries: A survey of the literature and empirical evidence”, Structural Change and Economic Dynamics, 19(1), s. 17-37.
  • Chakrabartı, A. (2001), “The Determinants of Foreign Direct Investments: Sensitivity Analyses of Cross-Country Regressions”, Kyklos, 54(1), s. 89-114.
  • Çak, M., ve Karakaş, M. (2009), “Doğrudan Yabancı Sermaye Yatırımlarını Belirleyen Unsurlar ve Etkileri”, Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, 26(1), s. 43-54.
  • Çinko, L. (2009). “Doğrudan Yabancı Sermaye Hareketlerinin Makroekonomik Etkileri”, Marmara Üniversitesi İktisadi ve İdari Bilimler Dergisi, 26(1), s. 117-131.
  • Data Oecd, https://data.oecd.org/ (Erişim tarihi:18.11.2019).
  • De Mooıj, R. A. ve Ederveen, S. (2008), “Corporate tax elasticities: A reader’s guide to empirical findings”, Oxford Review of Economic Policy, 24(4), s. 680–697.
  • De Mooıj, R.A. ve Ederveen, S. (2005), “Explaining the Variation in Empirical Estimates of Tax Elasticities of Foreign Direct Investment”, Tinbergen Institute Discussion Paper, No. 2005-108/3.
  • Devereux, M. P. ve Freeman, H. (1995), “The impact of tax on foreign direct investment: empirical evidence and the implications for tax integration schemes”, International Tax and Public Finance, 2(1), s. 85-106.
  • Diamond, J., Zodrow G. ve Carroll, R. (2013). “Macroeconomic Effects of Lower Corporate Income Tax Rates Recently Enacted Abroad”, Ernst & Young, March.
  • Djankov, S., Ganser, T., McLiesh, C., Ramalho, R., ve Shleifer, A. (2010). “The effect of corporate taxes on investment and entrepreneurship”, American Economic Journal: Macroeconomics, 2(3), s.31-64.
  • Drukker, D. M. (2003). “Testing for serial correlation in linear panel-data models”, The Stata Journal, (3)2, s. 1-10.
  • Dünya Bankasi, https://databank.worldbank.org/source/world-development-indicators (Erişim tarihi:18.11.2019).
  • Greene, W. (2000), Econometric Analysis, New York:Prentice-Hall.
  • Gropp, M. R. ve Kostial, M. K. (2000), “The disappearing tax base: is foreign direct investment (FDI) eroding corporate income taxes?”, European Central Bank Working Paper Series, No:31, s. 1-35.
  • Hartman, D.G. (1985), “Tax Policy and Foreign Direct Investment”, Journal of Public Economics, 26 (1), s. 107-121.
  • Hausman, J. A. (1978). “Specification tests in econometrics”, Econometrica, 46, s. 1251–1271.
  • Hines, Jr. (1999). “Lessons from behavioral responses to international taxation”, National Tax Journal, 52(2), s. 305–322.
  • Hunady, J. ve Orviska, M. (2014). “Determinants of Foreign Direct Investment in EU Countries–Do Corporate Taxes Really Matter?”, Procedia Economics and Finance, 12, s. 243-250.
  • Janicki, H. P., ve Wunnava, P. V. (2004). “Determinants of foreign direct investment: empirical evidence from EU accession candidates”, Applied economics, 36(5), s. 505-509.
  • Kubicova, J., (2013), “The Role of Corporate Income Tax in Foreign Direct Investment Inflows into the “Old” and “New” EU Member States”, Research Project VEGA, 1(0238), s. 222-233.
  • Leitao, N.C. ve Faustino, H., C. (2010), “Determinants of Foreign Direct Investment in Portugal”, Journal of Applied Business and Economics, 11(3), s. 19-26.
  • Mohamed, S. E. ve Sidiropoulos, M. G. (2010), “Another look at the determinants of foreign direct investment in MENA countries: an empirical investigation”, Journal of Economic Development, 35(2), s. 75-95
  • Morisset, J. ve Pirnia, N. (1999), “How Tax Policy and Incentives Affect Foreign Direct Investment: A Review”, World Bank Policy Research Working Paper, No. 2509.
  • Oecd Statistics, https://stats.oecd.org/ (erişim tarihi:18.11.2019).
  • Olıveıra, J. P. T. L. (2017). “Foreign Direct Investment according to different countries' stages of Human Development”, Universidade do Porto - Faculdade de Economia do Porto.
  • Pantelıdıs, P. ve Paneta, E. (2016). “Determinants of inward foreign direct investment in Greece”, Journal of Economics, Business and Management, 4(5), s. 367-371.
  • Quazı, R., (2007). “Economic Freedom and Foreign Direct Investment in East Asia”, Journal of the Asia Pacific Economy, 12 (3), s. 329-344.
  • Sato, T. (2012). “Empirical Analysis of Corporate Tax and Corporate Tax and Foreign Direct Investment”, Public Policy Review, 8 (1), s. 1-20.
  • Shahzad, N. ve Zahid M. (2011) “The Determinants of Foreign Direct Investment in Pakistan”, Abasyn Journal of Social Sciences, 5(1), s. 111-121.
  • Slemrod, J. B. (1990). “Tax effects on foreign direct investment in the United States: Evidence from a cross-country comparison”, In Taxation in the Global Economy, University of Chicago Press, s.. 79-122.
  • Sudsawasd, S. (2008). “Taxation, business regulation, and foreign direct investment in East Asia”, Deepening economic integration, The ASEAN economic community and beyond. Chiba IDE-JETRO: ERIA Research Project Report, s. 239-265.
  • Talpos, I. ve Vancu, I. (2009). “Corporate Income Taxation Effects on Investment Decisions in The European Union”, Annales Universitatis Apulensis Series Economic, 11(1) s. 513-518.
  • Wheeler, D. ve Mody, A. (1992). “International Investment Location Decisions: The Case of U.S. firms”, Journal of International Economics, 33(1-2), s. 57-76.
  • Wooldridge, J. M. (2002). Econometric Analysis of Cross Section and Panel Data. Cambridge, Massachusetts:The MIT Press.
  • Yerdelen Tatoğlu, F. (2018), İleri Panel Veri Analizi Stata Uygulamalı, Beta Basım Yayım, Düzenlenmiş ve Yenilenmiş 3. Baskı: İstanbul.
There are 40 citations in total.

Details

Primary Language Turkish
Journal Section Research Article
Authors

Dilek Göze Kaya 0000-0003-3477-1877

Zeynep Ezanoğlu 0000-0002-4601-7567

Publication Date October 24, 2020
Submission Date February 19, 2020
Acceptance Date July 14, 2020
Published in Issue Year 2020 Issue: 2020 Sonbahar Özel Sayı I/II

Cite

APA Göze Kaya, D., & Ezanoğlu, Z. (2020). OECD ÜLKELERİNDE KURUMLAR VERGİSİ ORANLARININ DOĞRUDAN YABANCI YATIRIMLAR ÜZERİNE ETKİSİ. Sosyal Bilimler Araştırmaları Dergisi(2020 Sonbahar Özel Sayı I/II), 30-37.
AMA Göze Kaya D, Ezanoğlu Z. OECD ÜLKELERİNDE KURUMLAR VERGİSİ ORANLARININ DOĞRUDAN YABANCI YATIRIMLAR ÜZERİNE ETKİSİ. JSSR. October 2020;(2020 Sonbahar Özel Sayı I/II):30-37.
Chicago Göze Kaya, Dilek, and Zeynep Ezanoğlu. “OECD ÜLKELERİNDE KURUMLAR VERGİSİ ORANLARININ DOĞRUDAN YABANCI YATIRIMLAR ÜZERİNE ETKİSİ”. Sosyal Bilimler Araştırmaları Dergisi, no. 2020 Sonbahar Özel Sayı I/II (October 2020): 30-37.
EndNote Göze Kaya D, Ezanoğlu Z (October 1, 2020) OECD ÜLKELERİNDE KURUMLAR VERGİSİ ORANLARININ DOĞRUDAN YABANCI YATIRIMLAR ÜZERİNE ETKİSİ. Sosyal Bilimler Araştırmaları Dergisi 2020 Sonbahar Özel Sayı I/II 30–37.
IEEE D. Göze Kaya and Z. Ezanoğlu, “OECD ÜLKELERİNDE KURUMLAR VERGİSİ ORANLARININ DOĞRUDAN YABANCI YATIRIMLAR ÜZERİNE ETKİSİ”, JSSR, no. 2020 Sonbahar Özel Sayı I/II, pp. 30–37, October 2020.
ISNAD Göze Kaya, Dilek - Ezanoğlu, Zeynep. “OECD ÜLKELERİNDE KURUMLAR VERGİSİ ORANLARININ DOĞRUDAN YABANCI YATIRIMLAR ÜZERİNE ETKİSİ”. Sosyal Bilimler Araştırmaları Dergisi 2020 Sonbahar Özel Sayı I/II (October 2020), 30-37.
JAMA Göze Kaya D, Ezanoğlu Z. OECD ÜLKELERİNDE KURUMLAR VERGİSİ ORANLARININ DOĞRUDAN YABANCI YATIRIMLAR ÜZERİNE ETKİSİ. JSSR. 2020;:30–37.
MLA Göze Kaya, Dilek and Zeynep Ezanoğlu. “OECD ÜLKELERİNDE KURUMLAR VERGİSİ ORANLARININ DOĞRUDAN YABANCI YATIRIMLAR ÜZERİNE ETKİSİ”. Sosyal Bilimler Araştırmaları Dergisi, no. 2020 Sonbahar Özel Sayı I/II, 2020, pp. 30-37.
Vancouver Göze Kaya D, Ezanoğlu Z. OECD ÜLKELERİNDE KURUMLAR VERGİSİ ORANLARININ DOĞRUDAN YABANCI YATIRIMLAR ÜZERİNE ETKİSİ. JSSR. 2020(2020 Sonbahar Özel Sayı I/II):30-7.


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