Social and Behavioral Sciences Commons^™

Tax Havens And Fdi Spillovers: Implications For Ldcs, Luisa Blanco, Cynthia Rogers

Luisa Blanco

Tax competition and spillover models offer ambiguous predictions concerning the economic impact of tax havens on non-tax havens. The implications of tax havens for less developed countries (LDCs), in particular, are not well understood and are little studied. This paper investigates the impact of tax havens on non-tax haven countries in terms of foreign direct investment (FDI). We investigate the importance of agglomeration effects by accounting for the level of FDI inflows as well as the role of geography by measuring proximity to the nearest tax haven. Our analysis yields several interesting findings. First, using panel data for 142 countries, …