Evaluation of Tax Competition in the European Union by Panel Data Analysis


MALIYE DERGISI, sa.176, ss.298-328, 2019 (ESCI İndekslerine Giren Dergi) identifier

  • Cilt numarası: Konu: 176
  • Basım Tarihi: 2019
  • Sayfa Sayıları: ss.298-328


The study aims to determine the existence of tax competition in the member states of the European Union by using a panel data analysis for the period of 1995-2015. In the analysis, three regression equations were tested with five hypotheses that are prevalent in the literature. A negative correlation between corporate tax rates and foreign direct investments (FDIs); a positive correlation between the political instability and foreign direct investment; a positive correlation between the size of the countries and the corporate tax rate; a negative correlation between the ratio of tax revenues collected over capital to the tax revenues collected through labor force as well as both openness and GDP; and a positive correlation between the openness of countries and corporate tax rates have been identified. It has been concluded that European Union countries, especially the small ones, resort to tax competition.