Does corporate taxation deter multinationals? Evidence from a historic event in Ireland

Arbeitspapier

We use a unique exogenous corporate tax policy change in the Republic of Ireland to investigate how corporate taxation affects foreign direct investment at the extensive and intensive margin. To this end we construct exhaustive sectoral and plant level panel data and use difference-in-differences strategies. Our results do not provide strong evidence that the increase in corporate tax rates for exporters did affect the entry or exit of plants from the US or UK in Ireland. Entry rates of German firms seem to be negatively affected, however. At the intensive margin there is evidence that foreign plants in Ireland reduce the size of their operations in response to the tax change.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Kiel Working Paper ; No. 1960

Classification and Topics

• Classification: Wirtschaft ; Multinational Firms; International Business ; Business Taxes and Subsidies including sales and value-added (VAT)
• Subject: multinational companies ; foreign direct investment ; corporate tax ; Ireland ; difference-in-differences

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Görg, Holger ; Strobl, Eric
• Event: Veröffentlichung
• (who): Kiel Institute for the World Economy (IfW)
• (where): Kiel
• (when): 2014

Further information

• Handle: http://hdl.handle.net/10419/103774
• Last update: 10.03.2025, 11:43 AM CET