Tax Policy, Foreign Direct Investment and Spillover Effects in Africa 1

Autor:	Amadou Boly, Seydou Coulibaly, Eric Nazindigouba Kere
Rok vydání:	2020
Předmět:	Tax policy Economics and Econometrics Spillover effect 050204 development studies 0502 economics and business 05 social sciences Economics Foreign direct investment International economics 050207 economics Development
Zdroj:	Journal of African Economies. 29:306-331
ISSN:	1464-3723 0963-8024
DOI:	10.1093/jae/ejz032
Popis:	Foreign direct investment (FDI) inflows are crucial for economic development. To attract them, countries have typically used reductions in corporate income tax (CIT) rates. This paper empirically assesses the impact of such CIT rate changes on FDI net inflows in Africa. Using a dynamic spatial Durbin model with fixed effects, our results show that cuts in CIT rates increase FDI net inflows in the host country and in the neighbouring countries in the short and long run. These results are robust to the use of alternative spatial weighting matrices as well as the inclusion of additional controls in the baseline specification. Furthermore, we find a strategic complementarity in FDI inflows between the countries in our sample, suggesting that an increase in FDI inflows in a host country is likely to stimulate FDI inflows of its neighbours.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::67adab8f84df77739a87cac219d148cb https://doi.org/10.1093/jae/ejz032 Zobrazit plný text záznamu