Corporate Taxation and Multinational Activity




Table 2: Estimation Results - Dissecting the Impact of Corporate Income Taxation on FDI

Explanatory variables

Fhll sample

Est. as
predicted

Exemption
method

Est. as
predicted

Credit
method

Est. as
predicted

Parent country corporate tax rate: ⅞,t-ι

0.850

(1.80)

Y

0.872

(1.61)

Y

-0.000
(0.00)

?

Host country corporate tax rate: f7∙,t-i

-1.428

(-2.45)

Y

-1.887

(-2.58)

Y

-0.685

(-0.76)

Withholding tax rate on repatriated profits: tj,t

-1.612

(-3.26)

Y

-2.111

(-2.65)

Y

-1.256

(-2.11)

Y

Parent country depreciation allowances: <5^-i

-4.257

(-4-51)

N

-3.508

(-2.10)

N

-3.301

(-2.78)

N

Host country depreciation allowances: <P∕,t-i

-0.427

(-0.65)

Y

-0.544

(-0.67)

Y

-0.495

(-0.49)

Y

ii,t-ι × ASKijft-j × I(ΔS,Jfyj⅛-ι > 0)

-0.004

(-0.11)

N

' 0.014
(0.35)

Y

-0.220

(-1.24)

N

δi,t-ι × ASKijft-I × l(ASKijft-ι > 0)

-0.165

(-2.31)

Y

(θ.l36

(-1.33)

Y

-0.361

(-2.28)

Y

δj,t-ι × ASKijft-ι × I(ASKijft-ι > 0)

0.074
(2.08)

Y

0.089

(1.23)

Y

' 0.015
(0.45)

Y

o⅛GDPit + GDPjty. ZGDPijt

1.955

(3.36)

Y

2.340

(3.02)

Y

4.951

(2.99)

Y

log(GDPit∕GDPjt): AGDPijt

-0.138

(-2.79)

Y

0.002
(0.03)

N

-0.312

(-5.12)

Y

ASKijt × AGDPijt × I(ASKijt > 0): INTlα

' 0.119
(0.94)

N

0.316

(1.13)

N

0.330

(1.23)

N

ASKijt × ZGDPijt × I(ASKijt > 0): INT2α

0.217

(1.43)

N

0.106
(0.43)

N

0.940
(2.42)

N

ASKijt × AGDPijt × I(ASKijt < 0): INT3α

0.047

(2.90)

N

0.015

(0.71)

N

0.085

(2.90)

N

(ΔSJ⅛)2× Iog(DLSTo): INT4α

Observations

R2

Fixed country-par effects: F-Statistic
degrees of freedom(DFl∕DF2)
p-value

Fixed time effects: F-Statistic
degrees of freedom(DFl∕DF2)
p-value

Sample Selection (Mill’s ratio)
p-value

-0.002

(-2.10)

2195

0.997

506.59
(388,1782)
0.000

10.53

(10,1782)
0.000 '

-0.133

0.124

Y

-0.000
(-0.12)

1257
0.998
2.68E+05
(223,1008)
0.000

13.77
(11,1008)
' 0.000 '

-0.149

0.273

Y

-0.002
(-1.44)

789
0.996

315.68

(138,626)
0.000
6.44

(11,626)
0.000
0.373
0.381

Y

Notes:

HAC-Corrected t-values in parentheses (Newey and West, 1987). α Parameter and standard error multiplied by 100.




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