TY  - JOUR
AU  - Jun,Joosung
TI  - Tax Policy and International Direct Investment
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3048
PY  - 1989
Y2  - July 1989
UR  - http://www.nber.org/papers/w3048
L1  - http://www.nber.org/papers/w3048.pdf
N1  - Author contact info:
Joosung Jun
E-Mail: jjun@nber.org
AB  - The effects of taxes on direct investment capital outflows are investigated using a theoretical model which integrates the investment and financial decisions of the parent and subsidiary. The resulting  marginal qs and costs of capital show that intrafirm investment allocation and tax neutrality results critically hinge on the marginal financing regime. By identifying a channel(s) through which a specific tax policy affects firm decisions, the model evaluates the combined effects of the home country tax system on direct investment. Out analysis suggests that while the 1986 U.S. Tax Reform Act may have an ambiguous effect on the overall level of capital outflows, it may induce more equipment investments to be undertaken abroad. 
ER  -