Javascript verkar inte påslaget? - Vissa delar av Lunds universitets webbplats fungerar inte optimalt utan javascript, kontrollera din webbläsares inställningar.
Du är här

FDI, taxes and agglomeration economies in the EU15

Publiceringsår: 2013
Språk: Engelska
Sidor: 2653-2664
Publikation/Tidskrift/Serie: Applied Economics
Volym: 45
Nummer: 18
Dokumenttyp: Artikel i tidskrift
Förlag: Routledge


This paper provides an empirical analysis of the impact of tax differentials and agglomeration economies on foreign direct investment (FDI). The paper departs from most previous work on FDI and tax competition in a number of ways. First, it incorporates several measures of agglomeration in order to investigate whether agglomeration economies mitigate the downward spiral in tax rates. As the strength of agglomeration economies may vary with the degree of integration, we use a panel of bilateral FDI flows for a highly integrated region including countries with similar economic structure–the EU15–from 1986 to 2004. Second, the empirical analysis explicitly deals with the problem of selection bias by using the Heckman sample selection approach. Also, by focusing on the EU15, we are able to provide additional information on the determinants of FDI between similar, higher-income countries. The empirical analysis provides some evidence of corporate marginal effective tax rates having an impact on FDI. This result, however, is sensitive to the inclusion of agglomeration economies. In particular, we find both Marshall types of technological externalities and overall concentration of economic activity to have an influence on FDI flows and, moreover, mitigating the negative impact of taxes.


  • Business Administration
  • FDI
  • corporate tax rates
  • agglomeration economies
  • Heckman selection model


  • ISSN: 1466-4283

Box 117, 221 00 LUND
Telefon 046-222 00 00 (växel)
Telefax 046-222 47 20
lu [at] lu [dot] se

Fakturaadress: Box 188, 221 00 LUND
Organisationsnummer: 202100-3211
Om webbplatsen