Skip to main content

Corporate Income Tax Competition and the Scope for National Tax Policy in the Enlarged Europe

  • Chapter

Keywords

These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

This is a preview of subscription content, log in via an institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (Canada)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   84.99
Price excludes VAT (Canada)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   109.99
Price excludes VAT (Canada)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info
Hardcover Book
USD   109.99
Price excludes VAT (Canada)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  • Appelman, M., Gorter, J., Lijesen, M., Onderstal, S. and R. Venniker (2003) Equal Rules or Equal Opportunities? Demystifying Level Playing Field, CPB Document, No 34.

    Google Scholar 

  • Bach, S., Seidel, B. and W. Scheremet (2002) Internationale Entwicklungstendenzen nationaler Steuersysteme - von der direkten zur indirekten Besteuerung?, DIW-Sonderhefte 172, Berlin.

    Google Scholar 

  • Balasubramanyam, V.N., Salisu, M. and D. Sapsford (1996) Foreign Direct Investment and Growth in EP and IS Countries, The Economic Journal, 106, pp. 92-105.

    CrossRef  Google Scholar 

  • Baldwin, R. E. and P. Krugman (2004) Agglomeration, Integration and Tax Harmonisation, European Economic Review, 48, pp. 1–23.

    CrossRef  Google Scholar 

  • Barba Navaretti, G. and A.J. Venables (2004) Multinational firms in the world economy, Princeton, N.J.: Princeton University Press.

    Google Scholar 

  • Baum, C.F., Schaffer, M.E. and S. Stillman (2003) Instrumental Variables and GMM: Estimation and Testing, Boston College, Department of Economics, Working paper No. 545.

    Google Scholar 

  • Bellak, C., Leibrecht, M. and R. Römisch (2005) A note on the appropriate measure of tax burden on Foreign Direct Investment to the CEECs, HWWA Discussion Paper, No. 336.

    Google Scholar 

  • Bellak, C. and M. Leibrecht (2005) Foreign Direct Investment in Central- and East European Countries: A Panel Study, The Leverhulme Centre for Research on Globalisation and Economic Policy (GEP), Conference on ‘‘Foreign Direct Investment and Taxation’’, Conference Paper, downloadable at: http://www.nottingham.ac.uk/economics/leverhulme/conferences/Oct_2005_Conf/bellak_leibrecht_nottingham.pdf

    Google Scholar 

  • Bellak, C. and M. Leibrecht (2006) Taxation of Foreign Direct Investment in Central- and East European Countries: Comparing Alternative Measures of Corporate Tax Burden, Proceedings of European Network on Industrial Policy, International Conference 2006.

    Google Scholar 

  • Bevan, A., Estrin S., and K. Meyer (2004) Foreign investment location and institutional development in transition economies, International Business Review, 13, pp. 43–64.

    CrossRef  Google Scholar 

  • Blomström, M. and A. Kokko (2003) The Economics of Foreign Direct Investment Incentives, NBER Working Paper 9489.

    Google Scholar 

  • Bordignon, M. and S. Brusco (2006) On enhanced cooperation, Journal of Public Economics, vol. 90, pp 2063–2090.

    CrossRef  Google Scholar 

  • Borenzstein, E., De Gregorio, J. and J.W. Lee (1998) How does Foreign Direct Investment affect Economic Growth? Journal of International Economics, 45, pp. 115–135.

    CrossRef  Google Scholar 

  • Brainard, S. L. (1997) An empirical assessment of the proximity-concentration trade-off between multinational sales and trade, The American Economic Review, 87, pp. 520–44.

    Google Scholar 

  • Brennan, G. and J. Buchanan (1980) The Power to Tax, Cambridge University Press.

    Google Scholar 

  • Breuss, F. (2002) Die wirtschaftspolitische Architektur der WWU, WIFO-Monatsberichte, 9, pp. 581–607.

    Google Scholar 

  • Brøchner, J., J. Jensen, P. Svensson and P.B. Sørensen (2006) The Dilemmas of Tax Coordination in the Enlarged European Union, CESIFO Working Paper No. 1859, Category 1: Public Finance, November.

    Google Scholar 

  • Brueckner, J.K. (2003) Strategic Interaction among Governments: An Overview of Empirical Studies, International Regional Science Review, 26, 2, pp. 175–188.

    CrossRef  Google Scholar 

  • Buch, C., and A. Lipponer (2004) Clustering or competition? The foreign investment behaviour of German banks, Deutsche Bundesbank Discussion Paper Series 1: Studies of the Economic Research Centre No. 06.

    Google Scholar 

  • Carkovic, M. and R. Levine (2005) Does foreign direct investment accelerate economic growth? In: T. Moran, E. Graham and M. Blomstrom, eds., Does foreign direct investment promote development? Institute for International Economics Publication, Washington, DC, pp. 195-220.

    Google Scholar 

  • Chakraborty, C. and P. Basu (2002) Foreign Direct Investment and Growth in India: a Cointegration Approach, Applied Economics, 34, pp. 1061-1073.

    CrossRef  Google Scholar 

  • Choe, J.I. (2003) Do foreign direct investment and gross domestic investment promote economic growth? Review of Development Economics, 7, pp. 44-57.

    CrossRef  Google Scholar 

  • Chowdhury, A., and G. Mavrotas. (2005) FDI and Growth: A Causal Relationship, UNU-Wider Research Paper No. 2005/25.

    Google Scholar 

  • Clausing, K.A. and C.L. Dorobantu (2005) Re-entering Europe: Does European Union candidacy boost foreign direct investment? Economics of Transition, 13, pp. 77-103.

    CrossRef  Google Scholar 

  • Cnossen, S. (2001) Tax Policy in the European Union: A Review of Issues and Options, FinanzArchiv, 58, pp. 1-93.

    CrossRef  Google Scholar 

  • DeMello, L.R. (1997) Foreign Direct Investment in Developing Countries and Growth: A Selective Survey, The Journal of Development Studies, 34, pp. 1-34.

    Google Scholar 

  • DeMooij, R. (2004) Does the enlarged European Union need a minimum corporate tax rate? Intereconomics, 39, pp. 180-182.

    CrossRef  Google Scholar 

  • DeMooij, R. A. and S. Ederveen (2005) Update von: Taxation and Foreign Direct Investment: A Synthesis of Empirical Research, The Leverhulme Centre for Research on Globalisation and Economic Policy (GEP), Conference on ‘‘Foreign Direct Investment and Taxation’’, Conference Paper, downloadable at: http://www.nottingham.ac. uk/economics/leverhulme/conferences/Oct_2005_Conf/ruud_de_mooij_paper.pdf

    Google Scholar 

  • DeMooij, R. A. and S. Ederveen (2003) Taxation and foreign direct investment: a synthesis of empirical research, International Tax and Public Finance 10, pp. 673-693.

    CrossRef  Google Scholar 

  • Devereux, M.P. and R. Griffith (1998) Taxes and the location of production: evidence from a panel of US multinational, Journal of Public Economics, vol. 68, 1998, pp. 335-367.

    CrossRef  Google Scholar 

  • Devereux, M.P. and R. Griffith (1999) The taxation of discrete investment choices, IFS Working Paper Series No. W98/16.

    Google Scholar 

  • Devereux, M.P. and R. Griffith (2002) The impact of corporate taxation on the location of capital: a review, Swedish Economic Policy Review, 9, pp. 79-102.

    Google Scholar 

  • Devereux, M.P. and R. Griffith (2003) Evaluating tax policy for location decisions. International Tax and Public Finance, 10, pp. 107-126.

    CrossRef  Google Scholar 

  • Devereux, M.P., Lockwood, B. and M. Redoano (2004) Do Countries Compete over Corporate Tax Rates? mimeo, University of Warwick.

    Google Scholar 

  • Devereux, M. P. and G. R. Hubbard (2004) Taxing Multinationals, International Tax and Public Finance, 10, 4, 2004, pp. 469 – 487.

    Google Scholar 

  • Devereux, M. P. (2004) Debating Proposed Reforms of the Taxation of Corporate Income in the European Union. International Tax and Public Finance, 11, pp. 71-89.

    CrossRef  Google Scholar 

  • Devereux, M. P (2006a) The Impact of taxation on the Location of Capital, Firms and Profit: A Survey of Empirical Evidence, University of Warwick, mimeo, April 2006.

    Google Scholar 

  • Devereux, M. P (2006b) Taxes in the EU New Member States and the Location of Capital and Profit, University of Warwick, mimeo, January 2006.

    Google Scholar 

  • DG-TCU (2004) Economic effects of tax cooperation in an enlarged European Union: Simulations of corporate tax harmonization and savings tax coordination, Final report, October, DG Taxation and Customs Union, published by Copenhagen Economics.

    Google Scholar 

  • Dunning, J. H. (1988) Explaining International Production (London: Unwin Hyman).

    Google Scholar 

  • Egger, P. (2000) A note on the proper specification of the gravity equation, Economics Letters 66, pp. 25–31.

    CrossRef  Google Scholar 

  • Egger, P. and M. Pfaffermayr (2003) The proper panel econometric specification of the gravity equation: A three-way model with bilateral interaction effects, Empirical Economics, 28, pp. 571–580.

    CrossRef  Google Scholar 

  • European Bank for Reconstruction and Development (various years), Transition Report, London.

    Google Scholar 

  • European Commission (1997) Towards Tax Co-ordination in the European Union: A Package to Tackle Harmful Tax Competition, COM(97) 495 Final, Brussels.

    Google Scholar 

  • European Commission (1998) Conclusions of the ECOFIN Council Meeting on 1 December 1997 Concerning Taxation Policy, Official Journal of the European CommunitiesC2(6/1/98).

    Google Scholar 

  • European Commission (2001) Company taxation in the internal market, COM (2001) 582 final (Bolkestein Report).

    Google Scholar 

  • European Commission (2003) An Internal Market without company tax obstacles: achievements, ongoing initiatives and remaining challenges, Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee (COM (2003) 726).

    Google Scholar 

  • European Commission (2005) Structures of the Taxation Systems in the European Union 1995 – 2004, Brussels.

    Google Scholar 

  • European Commission (www) http://europa.eu/scadplus/nice_treaty/cooperations_en.htm (download: December 2006).

    Google Scholar 

  • Eurostat (2002) European Union Foreign Direct Investment Yearbook 2001, Luxembourg.

    Google Scholar 

  • Feld, L. P. (2005) Capital Taxation in an Enlarged EU: The Case for Tax Competition, OeNB Workshops, Proceedings of OeNB Workshops, Capital Taxation after EU Enlargement, January pp. 118 – 150.

    Google Scholar 

  • Finkenzeller, M. and Ch. Spengel (2004) Measuring the Effective Levels of Company Taxation in the New Member States: A Quantitative Analysis, European Commission Taxation Papers, Working Paper 7, Paris.

    Google Scholar 

  • Frenkel, M., Funke, K. and G. Stadtmann (2004) A panel analysis of bilateral FDI flows to emerging economies, Economic Systems 28, pp. 281–300.

    CrossRef  Google Scholar 

  • Fuest, C. and W. Fuest (2004) A minimum corporate tax rate would be harmful for both high and low tax countries, Intereconomics, 39, pp. 183–186.

    Google Scholar 

  • Fuest, C. and B. Huber (2003) Zur Koordinierung der Unternehmensbesteuerung in Europa, Vierteljahrshefte zur Wirtschaftsforschung, 72, pp. 378–390.

    CrossRef  Google Scholar 

  • Genschel, P. (2002) Steuerharmonisierung und Steuerwettbewerb in der Europäischen Union, Campus Verlag, Frankfurt/New York.

    Google Scholar 

  • Gèrard, M. and J.M. Weiner (2003) Cross-Border Loss Offset and Formulary Apportionment: How Do They Affect Multijurisdictional Firm Investment Spending and Interjursidictional Tax Competition? CESifo Working Paper, No. 1004.

    Google Scholar 

  • Gordon, R., Kalambokidis, L. and J. Slemrod (2003) Do we now collect any tax revenue from taxing capital income? Journal of Public Economics, 88, pp. 981–1009.

    CrossRef  Google Scholar 

  • Gorter, J. and A. Parikh (2003) How sensitive is FDI to differences in corporate income taxation within the EU? DeEconomist, 151, pp. 193–204.

    CrossRef  Google Scholar 

  • Grabowski, M.H. (2005) Reforms of Tax Sytems in Transition Countries, Transition Studies Review, 12, pp. 293–312.

    CrossRef  Google Scholar 

  • Griffith, R. and A. Klemm (2005) What has been the tax competition experience of the last 20 years? The Institute of Fiscal Studies, Working Paper 04/05.

    Google Scholar 

  • Hansen, H. and J. Rand (2005) On the Causal Links between FDI and Growth in Developing Countries, UNU-Wider Research Paper No. 2005/31.

    Google Scholar 

  • Hansson, Å. and K. Olofsdotter (2004) Integration and tax competition: An empirical study for OECD countries, Department of Economics, Lund University, mimeo.

    Google Scholar 

  • Haufler, A. (2001) Taxation in a Global Economy, Cambridge University Press.

    Google Scholar 

  • Head, K. (2003) Gravity for beginners, Web Download.

    Google Scholar 

  • Hellerstein, W. and C. McLure (2004) The European Commission’s Report on Company Income Taxation: What the EU Can Learn from the Experience of the US States, International Tax and Public Finance, 11, pp. 199–220.

    CrossRef  Google Scholar 

  • Hirschman, A.O. (1970) Exit, Voice, and Loyalty: Responses to Decline in Firms, Organizations, and States, Cambridge: Harvard University Press.

    Google Scholar 

  • Jacobs, O. H. and C. Spengel (2002) Effective Tax Burden in Europe, ZEW Economic Studies, Vol. 15, Heidelberg / New York.

    Google Scholar 

  • Keen, M. (1996) The welfare economics of tax coordination in the European Community, in: M.P. Devereux (ed.) The economics of tax policy, Oxford University Press., pp. 189–214.

    Google Scholar 

  • Keen, M. (1998) Vertical Tax Externalities in the Theory of Fiscal Federalism, IMF Staff Papers, 45, September.

    Google Scholar 

  • King, M. A. and D. Fullerton (1984) The Taxation of Income from Capital, The University of Chicago Press, Chicago and London.

    Google Scholar 

  • Klemm, A. (2004) A minimum rate without a common base? Intereconomics, 39, pp. 186–189.

    Google Scholar 

  • Krogstrup, S. (2004a) A Synthesis of Recent Developments in the Theory of Capital Tax Competition, EPRU Working Paper, 02/2004, Copenhagen.

    Google Scholar 

  • Krogstrup, S. (2004b) Are Corporate Tax Burdens Racing to the Bottom in the European Union? EPRU Working Paper, 04/2004, Copenhagen.

    Google Scholar 

  • Leibrecht, M. and R. Römisch (2002) Comparison of tax burden, WIIW Research Report No. 292, Vienna.

    Google Scholar 

  • Lim, E.-G. (2001) Determinants of, and the Relation Between, Foreign Direct Investment and Growth: A Summary of the Recent Literature, IMF Working Paper, WP/01/175.

    Google Scholar 

  • Liu, X., Burridge, P. and P.J.N. Sinclair (2002) Relationships between Economic Growth, Foreign Direct Investment and Trade: Evidence from China. Applied Economics, 34, pp. 1433–1440.

    CrossRef  Google Scholar 

  • Maher, M. and H. Christiansen (2001) Growth, Technology Transfer and Foreign Direct Investment, OECD Paper presented at the OECD Global Forum on International Investment, Mexico City, November.

    Google Scholar 

  • Markusen, J. R. (2002) Multinational Firms and the Theory of International Trade, MIT Press, Cambridge, MA.

    Google Scholar 

  • Mátyás, L. (1997) Proper Specification of the Gravity Model, The World Economy, 20, pp. 363–368.

    CrossRef  Google Scholar 

  • Mátyás, L., Kónya N. and M.N. Harris (2001) Modelling Export Activity of Eleven APEC Countries, Melbourne Institute Working Paper, No. 5/00.

    Google Scholar 

  • Mendoza, E.G., Razin, A. and L.L. Tesar (1994) Effective tax rates in macro-economics, Cross-country estimates of tax rates on factor incomes and consumption, Journal of Monetary Economics, 34, pp. 297–323.

    CrossRef  Google Scholar 

  • Mendoza, E.G, and L L. Tesar (2003) Winners and Losers of Tax Competition in the European Union, NBER Working Paper, No.10051.

    Google Scholar 

  • Musgrave, P. B (2000) Interjurisdictional Equity in Company Taxation: Principles and Applications to the European Union, in: Cnossen, S. (ed.) Taxing Capital in the European Union, Oxford University Press, Oxford.

    Google Scholar 

  • Musgrave, R. A. (1990) Comment on Whalley, J. Foreign responses to US tax reform, in: Slemrod, J. (ed.) Do Taxes Matter? The Impact of the Tax Reform Act of 1986, The MIT Press, Cambridge and London, pp. 315 – 318.

    Google Scholar 

  • Mutti, J. and H. Grubert (2004) Empirical Asymmetries in Foreign Direct Investment and Taxation, Journal of International Economics, 62, pp. 337–358.

    CrossRef  Google Scholar 

  • Nair-Reichert, U. and D. Weinhold (2001) Causality tests for cross-country panels: a new look at FDI and economic growth in developing countries, Oxford Bulletin of Economics and Statistics, 63, pp. 153–171.

    CrossRef  Google Scholar 

  • Nicodème, G. (2001) Computing effective corporate tax rates: comparisons and results, Directorate General for Economic and Financial Affairs, Economic Paper No. 153.

    Google Scholar 

  • Nicodème, G. (2006) Corporate tax Competition and Coordination in the European Union: what do we know? Where do we stand?, Directorate-General for Economic and Financial Affairs, European Economy, European Commission, Economic Papers,no. 250.

    Google Scholar 

  • Oates, W.E. (2001) Fiscal competition or harmonisation? Some reflections, National Tax Journal, LIV, pp. 507–512.

    Google Scholar 

  • OECD (1991) Taxing Profits in a Global Economy: Domestic and International Issues, Paris.

    Google Scholar 

  • OECD (1998) Harmful Tax Competition: An Emerging Global Issue, Paris.

    Google Scholar 

  • OECD (2004) International Direct Investment Statistics Yearbook 1991 –2002, Paris.

    Google Scholar 

  • Parry, I.W.H. (2003) How large are the Welfare Costs of Tax Competition? Journal of Urban Economics, 54, pp. 39–60.

    CrossRef  Google Scholar 

  • Pinto, C. (2003) Tax Competition and EU Law, EUCOTAX Series on European Taxation, Kluwer Law International: The Hague.

    Google Scholar 

  • Randzio-Plath, C. (2000) Entwurf eines Berichtes über die Fortschritte bei der Steuerkoordinierung in der Europäischen Union, (2000/2040(INI) Par 2, Ausschuße für Wirtschaft und Währung.

    Google Scholar 

  • Rodrik, D. (1997) Has Globalization Gone Too Far, Institute for International Economics, Washington D.C.

    Google Scholar 

  • Sinn, H.W (1997) The Selection Principle and Market Failure in Systems Competition, Journal of Public Economics, 66, pp. 247–274.

    CrossRef  Google Scholar 

  • Slemrod, J. (2004) Are corporate tax rates, or countries, converging?, Journal of Public Economics, vol. 88, pp. 1169–1186.

    CrossRef  Google Scholar 

  • Sørensen, P.B. (2001) Tax coordination in the European Union: What are the issues? Swedish Economic Policy Review, 8, pp. 143–195.

    Google Scholar 

  • Sørensen, P.B. (2003) International Tax Competition: A New Framework for Analysis, Economic Analysis & Policy, 33, pp. 179–192.

    Google Scholar 

  • Sørensen, P.B. (2004) International Tax Coordination: Regionalism versus Globalism, Journal of Public Economics, 88, pp. 1187–1214.

    CrossRef  Google Scholar 

  • Swenson, D.L. (2004) Foreign Investment and the Mediation of Trade Flows, Review of International Economics, 12, pp. 609–629.

    CrossRef  Google Scholar 

  • Treaty of Nice (2002) http://www.eurotreaties.com/nice.html (download: December 2006).

    Google Scholar 

  • Treaty of Amsterdam (1997) http://www.eurotreaties.com/amsterdamtext.html (download: December 2006).

    Google Scholar 

  • UNECE (2001) Survey of Europe 2001: Ch. 5: Economic Growth and Foreign Direct Investment in the Transition Economies, Luxembourg.

    Google Scholar 

  • Van Ark, B. and E. Monnikhof (2000) Productivity and Unit Labour Cost Comparisons: A Database, Employment Paper, No. 5, International Labour Organisation, Geneva.

    Google Scholar 

  • Volkerink, B. and J. DeHaan (2002) Tax ratios in macroeconomics: Do taxes really matter? Empirica, 29, pp. 209–224.

    CrossRef  Google Scholar 

  • Weiner, J. M and H.J. Ault (1998) The OECD’s Report on harmful Tax Competition, National Tax Journal, 51, 3, pp. 601–608.

    Google Scholar 

  • Wildasin, D. E. (2002) Tax coordination: The importance of institutions, Swedish Economic Policy Review, 9, pp. 171–194.

    Google Scholar 

  • Wildasin, D. E. (2005) Fiscal Competition, IFIR Working Paper No. 2005–05.

    Google Scholar 

  • Wilson, J. D. (1999) Theories of Tax Competition, National Tax Journal, 52, pp. 269–304.

    Google Scholar 

  • Wilson, J. D. and D. E. Wildasin (2004) Capital Tax Competition: Bane or Boon? Journal of Public Economics, 88, pp. 1065–1091.

    CrossRef  Google Scholar 

  • Winner, H. (2005) Has Tax Competition Emerged in OECD Countries? Evidence from Panel Data, International Tax and Public Finance, 12, pp. 667–687.

    CrossRef  Google Scholar 

  • Wooldridge, J. M. (2002) Econometric Analysis of Cross Section and Panel Data (Cambridge: MIT-Press).

    Google Scholar 

  • Zodrow, G. R. (2003) Tax Competition and Tax Coordination in the European Union, International Tax and Public Finance, 10, pp. 651–671.

    CrossRef  Google Scholar 

  • Zodrow, G.R. (2006) Capital Mobility and Source-Based Taxation of Capital Income in Small Open Economies, International Tax and Public Finance, 13, pp. 269–294.

    CrossRef  Google Scholar 

  • Zodrow, G. R. and P. Mieskowski (1986) Pigout, Tiebout, Property Taxation and the Underprovision of Local Public Goods, Journal of Urban Economics, 19, pp. 356–370.

    CrossRef  Google Scholar 

Download references

Authors

Editor information

Editors and Affiliations

Rights and permissions

Reprints and permissions

Copyright information

© 2007 Springer

About this chapter

Cite this chapter

Bellak, C., Leibrecht, M. (2007). Corporate Income Tax Competition and the Scope for National Tax Policy in the Enlarged Europe. In: Andersson, K., Eberhartinger, E., Oxelheim, L. (eds) National Tax Policy in Europe. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-70711-0_2

Download citation

Publish with us

Policies and ethics