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Recent reductions in barriers to the international flow of capital have meant that taxation of corporate profits may be more influential than before in investment location decisions. This article investigates the importance of corporate taxation in such decisions in this new global environment. It also investigates the comparative importance of the various corporate tax system attributes in potential investors’ appraisals of these systems.

A survey of executives of multinational corporations was undertaken. Of the many factors involved in investment location decisions, corporate taxation was found to be one of the most important, although political stability, size of the local market, proximity to markets, and the local macro-economic environment were of greater importance. The most important corporate tax system attributes in investors’ appraisals were found to be broad systemic ones such as its transparency and predictability, as well specific features such as the statutory tax rate.


HKIBS Working Paper Series 035-990

Recommended Citation

Simmons, R. S. (2000). Corporate taxation and the investment location decisions of multinational corporations (HKIBS Working Paper Series 035-990). Retrieved from Lingnan University website: