Competing for Foreign Direct Investments: A Real Options Approach

Arbeitspapier

This paper uses the Bad News Principle to study how the ability of multinationals to shift profits by transfer pricing affects both the timing of foreign direct investment decisions and government tax policy. A main finding of the paper is that if countries compete to attract foreign direct investments, only weak conditions are needed to establish that welfare is higher when firms can postpone irreversible investments as opposed to when they cannot.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 929

Classification and Topics

• Classification: Wirtschaft ; Business Taxes and Subsidies including sales and value-added (VAT)
• Subject: corporate taxation ; irreversibility ; MNE ; real options and uncertainty

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Panteghini, Paolo ; Schjelderup, Guttorm
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/76423
• Last update: 10.03.2025, 11:42 AM CET