Tax holidays and profit-repatriation rates for FDI firms: the case of the Czech Republic

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F70883521%3A28120%2F23%3A63571660" target="_blank" >RIV/70883521:28120/23:63571660 - isvavai.cz</a>

Result on the web

<a href="https://doi.org/10.1057/s41599-023-02369-4" target="_blank" >https://doi.org/10.1057/s41599-023-02369-4</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1057/s41599-023-02369-4" target="_blank" >10.1057/s41599-023-02369-4</a>

Result language

angličtina

Original language name

Tax holidays and profit-repatriation rates for FDI firms: the case of the Czech Republic

Original language description

The Czech Republic has been a promising destination for foreign investors due to its locational advantages and tax-incentive policy. However, the profit-repatriation rate in the country is extremely high, which results in less capital being available for development. This paper studies the differences in profit-repatriation rates among FDI (foreign direct investment) firms in the Czech Republic after the appearance of tax-holiday incentives from 2008 to 2019. The precondition is to find the determinants of the repatriation rate of FDI firms, and the results show that the profit repatriation rate of FDI firms is positively affected by firm size and the liquidity of firms and negatively affected by investment opportunities and leverage. The paper divides FDI firms into several groups and examines the differences in repatriation rates between them before revealing the determinants of these differences. Firstly, there is no difference in profit repatriation between FDI firms with tax incentives and those without tax incentives. Next, we divide the FDI firms with tax incentives into two groups: those who still enjoy the tax incentives and those who no longer enjoy the tax incentives. The FDI firms with tax incentives that are in the tax-incentive period repatriate less than FDI firms with tax incentives that are not in the tax period any longer. The difference stems from the endowment effect, and three determinants that can reduce the repatriation rate of FDI firms that are no longer in the tax period are investment opportunities, leverage, and firm size.

Czech name

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Czech description

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Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

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OECD FORD branch

50206 - Finance

Project

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Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2023

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Humanities and Social Sciences Communications

ISSN

2662-9992

e-ISSN

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Volume of the periodical

10

Issue of the periodical within the volume

1

Country of publishing house

GB - UNITED KINGDOM

Number of pages

12

Pages from-to

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UT code for WoS article

001105828200007

EID of the result in the Scopus database

2-s2.0-85177049481