Are Tax Havens Good Neighbours? FDI Spillovers and Developing Countries
This paper investigates the impact of tax havens on non-tax haven countries in terms of foreign direct investment (FDI). We analyze the importance of agglomeration effects by including FDI inflow levels in tax havens and capture geographic spillovers by measuring proximity to the nearest tax haven. Our analysis yields several interesting findings. First, using panel data for 142 countries, we find evidence of positive spillovers from tax havens to nearby developing countries, but not to nearby developed countries. Second, restricting our panel to developing countries, we find the positive effect of tax haven FDI on developing countries to be robust. Third, we find that geographic distance matters for financial flows: developing countries which are the closest to a nearby tax haven benefit the most in terms of FDI inflows. This result is robust to accounting for spatial interdependence of FDI.
Year of publication: |
2014
|
---|---|
Authors: | Blanco, Luisa R. ; Rogers, Cynthia L. |
Published in: |
Journal of Development Studies. - Taylor & Francis Journals, ISSN 0022-0388. - Vol. 50.2014, 4, p. 530-540
|
Publisher: |
Taylor & Francis Journals |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Do tax havens really flourish?
Blanco, Luisa R., (2012)
-
Are tax havens good neighbours? : FDI spillovers and developing countries
Blanco, Luisa R., (2014)
-
Competition between tax havens : does proximity matter?
Blanco, Luisa, (2012)
- More ...