TY - JOUR
T1 - FDI and income inequality in tax-haven countries
T2 - The relevance of tax pressure
AU - Soto, Gonzalo
AU - Jardon, Carlos M.
AU - Martinez-Cobas, Xavier
N1 - Publisher Copyright:
© 2023 The Author(s)
PY - 2024/3
Y1 - 2024/3
N2 - The agenda of the United Nations sustainable development goals (SDGs) for 2030 has shifted attention from poverty to equality. Unlike poverty, which has declined, inequality has not significantly changed in the past twenty years. Hence, in the absence of a strong fiscal context in which profits are redistributed from governments to their local societies, tax havens are likely to cement inequality in place. In this paper, we study the effects of foreign direct investment (FDI) on income inequality in terms of different indicators using a panel data analysis in 46 countries with a low tax burden over the period 2000–2021. Our results confirm that FDI contributes to mitigating income inequality and improving welfare in the countries studied. This process is likely to be more effective in the presence of a supportive tax framework.
AB - The agenda of the United Nations sustainable development goals (SDGs) for 2030 has shifted attention from poverty to equality. Unlike poverty, which has declined, inequality has not significantly changed in the past twenty years. Hence, in the absence of a strong fiscal context in which profits are redistributed from governments to their local societies, tax havens are likely to cement inequality in place. In this paper, we study the effects of foreign direct investment (FDI) on income inequality in terms of different indicators using a panel data analysis in 46 countries with a low tax burden over the period 2000–2021. Our results confirm that FDI contributes to mitigating income inequality and improving welfare in the countries studied. This process is likely to be more effective in the presence of a supportive tax framework.
KW - FDI
KW - Gini index
KW - Income inequality
KW - Palma ratio
KW - Tax havens
UR - http://www.scopus.com/inward/record.url?scp=85182424173&partnerID=8YFLogxK
U2 - 10.1016/j.ecosys.2023.101172
DO - 10.1016/j.ecosys.2023.101172
M3 - Article
AN - SCOPUS:85182424173
SN - 0939-3625
VL - 48
JO - Economic Systems
JF - Economic Systems
IS - 1
M1 - 101172
ER -