Work

How do effective taxation and institutions affect FDI nowadays?

Year: 2025

Type: article

Abstract: We explore the effects of effective taxation and institutional quality on sectoral FDI. Our analysis includes European countries, using data from 2002 to 2020. Employing a GMM approach, we show that an increase in effective taxation reduces sectoral FDI flow. Among the institutional variables, tertiary enrolment attracts FDI, while secondary attainment has varying effects depending on the sector. Our findings suggest that governments should lower taxes to encourage more FDI flows and strengthen tertiary and secondary enrolment.

Source: Economic Change and Restructuring

DOI: 10.1007/s10644-025-09875-2

Author: Nicolae-Bogdan Ianc

Institutions: Université d'Orléans, West University of Timişoara, Laboratoire d’Économie d’Orléans

Language: English

Topic: International Business and FDI

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $3,290