Population Aging, Foreign Direct Investment, And Tax Competition
- Topics:
- Foreign Direct Investment
- Tags:
- Currency & Foreign Exchange,
- Finance,
- Foreign Direct Investment,
- Foreign Direct Investment (FDI),
- Investment,
- Tax
- Source:
- University of Oregon
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Overview: This paper studies the role of population aging for Foreign Direct Investment (FDI) and the strategic taxation of capital. Importantly, this theoretical model suggests that the labor market implications of aging differ from the financial market aspects. While population aging may be associated with a lower capital stock in the home country and less foreign direct investment, the effects through the labor market and employment tend to generate larger outbound capital flows. To quantify these aspects, the authors conducted regression analysis to empirically document how population aging affects FDI. To be specific, data on both US inbound and outbound FDI were used. Notably, the estimates between the US and other developed countries conform quite closely to the predictions of this theory.
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Format: PDF | Size: 290KB | Date: May 2006 | Pages: 62
