Reinvestment and effective corporate income tax rates in V4 countries

Research background: In the Visegrad Four (V4) countries (Poland, Czech Republic, Hungary, and Slovakia), inward foreign direct investment (FDI) shows high shares in exports gross domestic product (GDP). Furthermore, reinvested earnings play a significant role national balances of payments (BoP). Therefore, it is crucial to investigate reinvestment rates effective corporate income tax (ETRs) transnational corporations (TNCs) financial institutions settled V4 compare them with said other European Union (EU) Member States. It essential unveil factors shaping investors? decisions reinvest profits. Policymakers should reflect on when cultivating overall business climate boost citizens? welfare. Purpose article: We aim identify determinants FDI profit rate as host economies from 2014 2019 draw comparison EU?27 average. dedicate special attention correlation between ETRs selected indicators specified World Bank?s Ease Doing Business (World Bank, 2020). Methods: To assess rates, we employ three-stage model multiple linear regression, where analyse extensive datasets published by International Monetary Fund (IMF), Eurostat, public aggregate country-by-country reports (CbCR) provided respective TNCs. Findings & value added: Our research that (CIT) significantly correlate rate. The same applies three sub-indicators (Starting business, Getting credit, Contract enforcement). Contrary findings Lundan (2006), Beugelsdijk et al. (2010), Nguyen Rugman (2015), Sutherland (2020), macroeconomic factors, profitability corporations, exchange stability turned out be statistically insignificant. has policy implications, for can contribute discussions enhancing environments ways motivate investors their added combines data unique relatively new CbCR databases.