Study Findings on Risk Management Detailed by a Researcher at University of Novi Sad (Asymmetric Effects of Tax Competition on FDI vs. Budget Balance in European OECD Economies: Heterogeneous Panel Approach): Insurance – Risk Management

2024 JAN 02 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- New research on risk management is the subject of a new report. According to news reporting out of Subotica, Serbia, by NewsRx editors, research stated, “The global trends in taxation have generated a “race to the bottom” in capital income taxation, which is intended to be stopped by OECD through the introduction of a global minimum tax rate (15% of effective average tax rate-EATR).”

Financial supporters for this research include Provincial Secretariat For Higher Education And Scientific Research, Autonomous Province of Vojvodina, Republic of Serbia.

Our news editors obtained a quote from the research from University of Novi Sad: “The question is whether the defined tax competition floor would have heterogeneous implications in different economies. The aim of this paper is to examine the long-term relationship between the EATR and FDI, and between the EATR and budget balance (BB) in European OECD economies in the period 1998-2021, using non-stationary, heterogeneous panels. According to the linear PMG model, a significant negative long-term relationship was revealed between the EATR and FDI and between the EATR and BB, while the error-correction parameters are significant and heterogeneous, showing that the speed of adjustments towards equilibrium is different across the analyzed economies.”

According to the news editors, the research concluded: “However, the nonlinear PMG results revealed asymmetry as the magnitude of the influence of an EATR reduction has a greater effect on FDI attraction and deficit deepening than an increase in the EATR on the opposite tendencies of FDI and deficit. Policymakers are facing a trade-off related to FDI attraction/budget deficit deepening when making decisions in relation to the EATR, and they are mostly oriented toward FDI inflow using EATR reduction in the analyzed economies.”

For more information on this research see: Asymmetric Effects of Tax Competition on FDI vs. Budget Balance in European OECD Economies: Heterogeneous Panel Approach. Risks, 2023,11(12). (Risks - http://www.mdpi.com/journal/risks). The publisher for Risks is MDPI AG.

A free version of this journal article is available at https://doi.org/10.3390/risks11120219.

Our news journalists report that additional information may be obtained by contacting Marina Beljic, Department of Economic Theory and Policy, Faculty of Economics in Subotica, University of Novi Sad, 24000 Subotica, Serbia. Additional authors for this research include Olgica Glavaški, Emilija Beker Pucar, Stefan Stojkov, Jovica Pejcic.

ORCID is an identifier for authors and includes bibliographic information. The following is ORCID information for the author of this research: Marina Beljic (http://orcid.org/0000-0003-2657-2421).

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