The Effects of Government Tax and Nontax Incentives on Foreign Direct Investment
研究分析了美国、英国等六国企业对政府税收与非税收激励在外国直接投资决策中的重要性评价，发现非税收激励不重要，税收激励仅边缘重要，而东道国产品需求和产品质量能力更为关键。
Tax and nontax government incentives are used to attract foreign direct investment. However, the efficacy of these provisions in influencing such investment decisions is uncertain. Many factors affect this decision such that the importance of tax and nontax government incentives is reduced and/or mitigated. This study presents an analysis of the importance of government tax and nontax incentives in the foreign direct investment decision of American, British, Canadian, French, German, and Japanese firms. The results indicate that nontax government incentives are perceived as unimportant and that tax incentives at best are perceived as marginally important in the decision.. Other factors such as product demand in the host country and the ability to produce a quality product are more important. INTRODUCTION There are numerous factors that affect a firm's decision to make a direct foreign investment (FDI). Tax and nontax government incentives (i.e., government grants) are two such factors. The effects of these incentives on the FDI decision are uncertain for several reasons. First, results of previous studies are mixed; some find these incentives to be an important factor in the decision, while others do not. Secondly, other factors might mitigate the effects of the government incentives. For example, the type of host country (developed or less developed) and the firm's plans for sale of production (market penetration in the host country or exportation to other countries (e.g., home)) might affect government incentives' effectiveness. This paper is an extension of Porcano's (1993) study. In that study, Porcano analyzed 21 factors that might affect a firm's FDI decision. While tax and nontax government incentives were addressed, he did not specifically analyze their impacts. The of the current study is to analyze the relative effects of tax and nontax government incentives on the FDI decisions and to identify the perceived role of tax incentives of American, British, Canadian, French, German, and Japanese firms. Some of the data reported in Porcano (1993) are used and some additional data are analyzed. The six countries were selected because they are major industrialized countries and are members of the Group of Seven. A questionnaire was mailed to the Vice President of Finance of a sample of firms in each of these countries. They were asked to rate the importance of numerous factors in the FDI decision. Respondents also were asked questions regarding the role of taxes in the FDI decision. The results suggest that while government incentives have some role in the FDI decision, there are more-important factors. The remainder of this paper is organized as follows. The next section provides a brief review of relevant literature and the hypotheses tested. The research method then is presented, followed by the results section, study limitations, and implications sections. PREVIOUS RESEARCH The efficacy of government incentives in stimulating investments in fixed assets has been studied via econometric models, experimental economics, and surveys. These studies primarily deal with the investment decision within a country, not into another (foreign) country. The results of econometric studies are mixed. Chirinko and Eisner (1983) suggest that the differences are due in part to model specification and that can get any answer one wants by making sure that the chosen model has specifications appropriate to one's purpose (p. 139). In a different study, Chirinko (1986) concludes that empirical evidence regarding the efficacy of tax incentives in stimulating investment in fixed assets is lacking. Using an experimental economics approach, Davis and Swenson (1993) found that tax incentives (depreciation and investment tax credit) did not increase investment in fixed assets. Demand for such assets was unresponsive to tax incentives, in part because of the implicit tax on the tax-favored assets. …