Impact of foreign direct investment inflows on tax revenues in OECD countries: A panel cointegration and causality analysis
Globalization process has led considerable increases in the global foreign direct investment flows especially as of mid-1980s. Foreign direct investment inflows have potential to affect economic growth, capital accumulation, human capital, competitiveness, development of finance sector and technolog...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
General Association of Economists from Romania
2018-03-01
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| Series: | Theoretical and Applied Economics |
| Subjects: | |
| Online Access: |
http://store.ectap.ro/articole/1318.pdf
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| Summary: | Globalization process has led considerable increases in the global foreign direct
investment flows especially as of mid-1980s. Foreign direct investment inflows have potential to
affect economic growth, capital accumulation, human capital, competitiveness, development of
finance sector and technological progress in the host country and in turn affects the tax revenues.
In this study, we analyzed the relationship among foreign direct investment inflows, economic
growth and total tax revenues in 33 OECD countries during 1995-2014 period using Westerlund-
Durbin-Hausmann (2008) panel cointegration test and Dumitrescu and Hurlin (2012) panel
causality test. We revealed a cointegrating relationship among foreign direct investment inflows,
economic growth and total tax revenues Furthermore, there was one-way causality from foreign
direct investment inflows to total revenues and bidirectional causality between economic growth
and foreign direct investment inflows. |
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| ISSN: | 1841-8678 1844-0029 |