Template-type: ReDIF-Paper 1.0
Author-Name:Kelly Edmiston
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Author-Name:Shannon Mudd 
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Author-Name: Neven Valev 
Author-Email: nvalev@gsu.edu
Author-Homepage: http://aysps.gsu.edu/ValevN.html
Author-Workplace-Name:  International Studies Program. Andrew Young School of Policy Studies, Georgia State University
Author-Workplace-Homepage:  https://icepp.gsu.edu/
Title: Incentive Targeting, Influence Peddling, and Foreign Direct Investment 
Abstract: We expand the traditional tax incentive redundancy argument by investigating 
 the implications of targeting incentives primarily to firms that would have invested anyway.
 Incorporating government revenue constraints, pliable tax officials, endogenous tax liabilities,
 and firms with heterogeneous before-tax returns, we show that tax incentives, 
 if given to the "wrong" firms, are not only ineffective in stimulating FDI, 
 but may reduce it. Data from countries of the former Eastern Bloc indicates 
 that tax incentive schemes have significantly negative impacts on FDI in countries 
 that poorly target firms.
Keywords: Incentive Targeting, Influence Peddling, Foreign Direct Investment
Length: 25 pages
Creation-Date: 2000-09-01
File-URL:http://icepp.gsu.edu/files/2015/03/ispwp0007.pdf
File-Format:Application/PDF
Handle: RePEc:ays:ispwps:paper0007