Coordination vs. Competitiveness of Effective Average Tax Rates in Relation to FDI: The Case of Emerging EU Economies†
Round 1
Reviewer 1 Report
Author/s/ have chosen a correct approach, taking into account that "EART is not the only factor that determines investors", so an analysis in ceteris paribus setting is necessary. However, this task is a great challenge for empirical work, having in mind the distorted institutions (e.g. in transition CEECs) whose impact cannot be approximated even by a categorical variable. However, their impact on the allocation decisions of the foreign investors /FIs/ can be decisive! With equal EARTs, substantial differences in "hardly measurable"circumstances can induce substantial imbalance in the locational choice. Also, expanding FDI in a particular country can be observed if FIs follow a strategy for entering a special target country (e.g. Czech Rep. or Hungary) even if lower taxation can be found nearby. Anyway, the author/s/ have taken the challenge to empirically analyse FDI determinants in emerging EU economies, even in data shortages (i.e. N=13 / T=24 should not be considered as enough in order to rely on asymptotically valid estimation and hypotheses testing methods).
Author Response
Please see the attachment.
Author Response File: Author Response.docx
Reviewer 2 Report
The presented text is suitable for publishing. The authors used appropriate sophisticated methods to analyze the economically important question - does EATR influence FDI?
There are some minor comments.
Typing error:
EATR redaction (sic!) and effects on FDI inflow. Various authors dealt with this relationship 68
inflow in the period 2204 (sic!)-2008 (122.48; 339.78; 369.34; 449.08; 163.22 % of GDP, 403
Results of Pesaran CD test are presented in Table A1 (sic! should be 2) (Appendix, panel a), which 540
at 5% significance level (Table A1 (sic! should be 2), panel b), meaning that all variables are non-stationary. 543
Model specification:
Row 334 - please, check the brackets. Is it correct? Is Y-X meaningful? Are there the same units?
Author Response
Please see the attachment.
Author Response File: Author Response.docx