How Taxing is Corruption on International Investors?
This paper studies the effect of corruption on foreign direct investment. The sample covers bilateral investment from twelve source countries to 45 host countries. There are two central findings. First, a rise in either the tax rate on multinational firms or the corruption level in a host country reduces inward foreign direct investment (FDI). In a benchmark estimation, an increase in the corruption level from that of Singapore to that of Mexico would have the same negative effect on inward FDI as raising the tax rate by fifty percentage points. Second, American investors are averse to corruption in host countries, but not necessarily more so than average OECD investors, in spite of the U.S. Foreign Corrupt PracticesAct of 1977. © 2000 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
Year of publication: |
2000
|
---|---|
Authors: | Wei, Shang-Jin |
Published in: |
The Review of Economics and Statistics. - MIT Press. - Vol. 82.2000, 1, p. 1-11
|
Publisher: |
MIT Press |
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Corruption and the Composition of Foreign Direct Investment : Firm-Level Evidence
Wei, Shang-Jin, (1999)
-
Border, Border, Wide and Far, How We Wonder What You Are
Wei, Shang-Jin, (1999)
-
Does Corruption Relieve Foreign Investors of the Burden of Taxes and Capital Controls?
Wei, Shang-Jin, (1999)
- More ...