To our knowledge, this paper provides the first evidence of the effects of FDI round-tripping incentives on the scale of round-tripping. We find that round-tripping could be an explanation for the data reporting discrepancies between FDI host and source countries since investors have no...

This paper develops a theoretical model with a dual tax system that provides preferential treatments for foreign investment. The study suggests that in order to benefit from the preferential tax incentives and gain better property rights, high-productivity domestic firms intend to disguise as...