The Effect of Corporate Tax on Foreign Direct Investments: A Panel Study for Turkey and European Union Countries

It is seen that foreign direct investments stemming from economic globalization process have been increasing all around the world. Corporate tax is one of the elements affecting foreign direct investment decision. Within this context, to analyse how corporate tax rates impact foreign direct investments by means of panel data regression model in 22 European Union countries and Turkey between the years of 2010-2019 constitutes the aim of this study. In this direction, the findings obtained from applied Hausman test analysis indicate us that it is necessary to be accepted fixed effects model from the models used in panel data analysis. According to the results of panel data analysis, it has been obtained to the results indicating that there is correlation between different variance, autocorrelation and interdivisional in the fixed effects model obtained from this study. When the findings from the study are examined, it is seen that corporate tax has a adverse impact on foreign direct investmens.