TY  - JOUR
AU  - Blonigen,Bruce A.
AU  - Davies,Ronald B.
TI  - The Effects of Bilateral Tax Treaties on U.S. FDI Activity
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7929
PY  - 2000
Y2  - October 2000
UR  - http://www.nber.org/papers/w7929
L1  - http://www.nber.org/papers/w7929.pdf
N1  - Author contact info:
Bruce Blonigen
Department of Economics
1285 University of Oregon
Eugene, OR 97403-1285
Tel: 541/346-4680
Fax: 541/346-1243
E-Mail: bruceb@uoregon.edu
M1  - published as Blonigen, Bruce A. and Ronald B. Davies. "The Effects Of Bilateral Tax Treaties On U.S. FDI Activity," International Tax and Public Finance, 2004, v11(5,Sep), 601-622.
AB  - The effects of bilateral tax treaties on FDI activity have been unexplored, despite significant ongoing activities by countries to negotiate and ratify these treaties.  This paper estimates the impact of bilateral tax treaties using both U.S. inbound and outbound FDI over the period 1966-1992. Our estimates suggest a statistically significant average annual increase of FDI activity for each additional year of a treaty which ranges from 2% to 8%, depending on the FDI activity measure and empirical framework we employ.  Examination for nonlinear effects of treaty age on FDI activity suggests that while treaties have an immediate impact on FDI flows, there is a substantial lag before treaty adoption positively affects FDI stocks and affiliate sales.  Finally, our results suggest that bilateral tax treaties have an effect on investment outside of the withholding tax rates they alter, which may include the commitment and risk reduction effects of these treaties.
ER  -