Tax Treaties and Foreign Direct Investment: Potential versus Performance

Author: Ronald B. Davies

Source: International Tax and Public Finance, Volume 11, Number 6, November 2004 , pp. 775-802(28)

Publisher: Springer

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Abstract:

Bilateral tax treaties are an important method of international tax cooperation. I survey the existing literature on these agreements, highlighting the differences between the standard view that treaties increase foreign direct investment and the empirical evidence that finds little support for this. I also discuss the key differences in treaty formation between developed countries relative to that between developed and developing nations.

Keywords: foreign direct investment; tax treaties; multinational corporations

Document Type: Research article

DOI: http://dx.doi.org/10.1023/B:ITAX.0000045331.76700.40

Affiliations: 1: Department of Economics, 435 PLC Building, 1285 University of Oregon, Eugene, OR 97403, USA., Email: rdavies@uoregon.edu

Publication date: 2004-11-01