Foreign ownership and corporate income taxation : an empirical evaluation - Harry Huizinga and Gaëtan Nicodème
Author(s): Harry Huizinga (Tilburg University and CEPR) and Gaëtan Nicodème (Directorate General for Economic and Financial Affairs)
Foreign ownership and corporate income taxation : an empirical evaluation - Harry Huizinga and Gaëtan Nicodème(273 kB)
Economic integration in Europe has not led to a ‘race to the bottom’ regarding corporate income taxes. This paper documents trends in the foreign ownership of companies in Europe and it examines whether foreign ownership has exerted a positive influence on corporate income tax levels. Using company-level data, we document that the foreign ownership share in Europe stood at around 21.5 percent in the year 2000. The estimation suggests that a one percentage point increase in foreign ownership increases the average corporate income tax rate between a half and one percent. Further international economic integration is likely to lead to higher foreign ownership shares with a concomitant positive influence on corporate taxation levels.
(European Economy. Economic Papers 185. June 2003.
Brussels. 50pp. Tab. Free.)
|ISBN 92-894-5833-X (online)||
|ISSN 1016-8060 (online)