Does a Tax Credit Matter for Job Creation by Multinational Enterprises?

39 Pages Posted: 21 Aug 2018

See all articles by Jozef Konings

Jozef Konings

University of Liverpool

Cathy Lecocq

KU Leuven

Bruno Merlevede

Ghent University - Department of General Economics

Date Written: August 2018

Abstract

We analyze the impact of a tax credit on jobs in multinational enterprises. In particular, we exploit the introduction of the 'notional interest deduction' regime in Belgium in 2006, an 'allowance for corporate equity', which aimed to provide an attractive tax system for multinational enterprises active in Belgium. We study employment growth in foreign affiliates of MNEs in Belgium and use as a control group the affiliates of the same MNEs in France. We find that the tax credit has increased employment in Belgian affiliates by 6 to 8 percent over the period 2006-2008.

Keywords: employment, Foreign direct investment, Multinational Enterprises, Tax policy

JEL Classification: F21, F23, H25

Suggested Citation

Konings, Jozef and Lecocq, Cathy and Merlevede, Bruno, Does a Tax Credit Matter for Job Creation by Multinational Enterprises? (August 2018). CEPR Discussion Paper No. DP13105, Available at SSRN: https://ssrn.com/abstract=3235588

Jozef Konings (Contact Author)

University of Liverpool ( email )

Chatham Street
Liverpool, L69 7ZA
United Kingdom

Cathy Lecocq

KU Leuven ( email )

Oude Markt 13
Leuven, Vlaams-Brabant 3000
Belgium

Bruno Merlevede

Ghent University - Department of General Economics ( email )

Tweekerkenstraat 2
Ghent, 9000
Belgium

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
238
PlumX Metrics