publication . Preprint . 2011

International Taxation and FDI Strategies: Evidence From US Cross-Border Acquisitions

Nils Herger; Christos Kotsogiannis; Steve McCorriston;
Open Access
  • Published: 01 Jan 2011
While there is a well-established body of empirical research documenting the negative effect of taxation on foreign direct investment (FDI), there is scant evidence on the extent to which international tax considerations (double taxation, international tax relief stipulated in bilateral tax treaties and the effect of withholding taxes) affect the role of taxation for FDI, and how tax issues differ according to the investment strategies—‘horizontal’ and ‘vertical’—pursued by %multinational firms. This paper addresses these issues. Using data on US acquisitions over the period 1995-2005 in 18 OECD countries, it is shown that international tax relief plays a critic...
free text keywords: Corporate taxation; Cross-Border acquisitions; FDI strategies; Tax treaties; Tax credits, jel:F15, jel:F21, jel:F23, jel:F33

5SDC data has been used in other studies including Di Giovanni (2005), Herger et al. (2008), and Hijzen et al. (2008).

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