Tax competition and foreign direct investments. Is there a connection?
Tax competition and foreign direct investments. Is there a connection?

Summary/Abstract: The issue of tax competition has fuelled a lot of interest and debates among theoreticians as well as practitioners during the last decades. The intense financial and labour flows due to globalization has led to a “race to the bottom” tax competition among countries, some theoreticians considering it as beneficial others, on the contrary, blaming it as harmful competition, encouraging misallocation of resources. The paper endeavors to find out whether the tax competition has indeed a significant influence on the foreign direct investments flow, or other determinants are equally or more important in this process.

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