The effect of corporate tax rates on foreign direct investment in the context of tax competition

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dc.contributor.authorAndrejkovicova, Ivana
dc.contributor.authorAndrejovska, Alena
dc.contributor.otherEkonomická fakultacs
dc.date.accessioned2026-03-11T12:50:08Z
dc.date.available2026-03-11T12:50:08Z
dc.description.abstractIn today’s globalized world, tax systems play a crucial role in influencing where investors allocate capital. Some countries recognize the importance of tax policies for national competitiveness, while others lag behind. This study examines the effect of tax competition and selected macroeconomic indicators on foreign direct investment (FDI) inflows in the European Union (EU). Using the generalized method of moments (GMM), the analysis includes data from 24 EU member states between 2002 and 2022. The primary aim is to verify the relationship between corporate tax rates and FDI in the context of tax competition. First, an analysis was performed for all countries, followed by a regional analysis dividing them into Eastern and Western European blocs. The results suggest that the statutory corporate income tax rate (CIT) does not have an immediate effect on foreign direct investment (FDI) inflows; however, a negative effect emerges with a longer time lag in the overall sample. Eastern Europe shows sensitivity of FDI to higher CIT rates with a delay, while in the more developed Western European countries, such a relationship was not confirmed. These findings highlight the importance of considering regional specificities when designing tax policies aimed at attracting foreign investment.en
dc.formattext
dc.identifier.doi10.15240/tul/001/2025-5-026
dc.identifier.eissn2336-5604
dc.identifier.issn1212-3609
dc.identifier.urihttps://dspace.tul.cz/handle/15240/178449
dc.language.isoen
dc.publisherTechnická Univerzita v Libercics
dc.publisherTechnical university of Liberec, Czech Republicen
dc.publisher.abbreviationTUL
dc.relation.ispartofEkonomie a Managementcs
dc.relation.ispartofEconomics and Managementen
dc.relation.isrefereedtrue
dc.rightsCC BY-NC
dc.subjectCorporate taxationen
dc.subjectforeign direct investmenten
dc.subjecttax competitionen
dc.subjectgeneralized method of momentsen
dc.subject.classificationF21
dc.subject.classificationH25
dc.titleThe effect of corporate tax rates on foreign direct investment in the context of tax competitionen
dc.typeArticleen
local.accessopen
local.citation.epage15
local.citation.spage1
local.facultyFaculty of Economics
local.filenameEM_1_2026_1
local.fulltextyes
local.relation.abbreviationE+Mcs
local.relation.abbreviationE&Men
local.relation.issue1
local.relation.volume29
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