Tax Incentives and Foreign Direct Investment: Evidence from the Nigeria Listed Manufacturing Firms

被引:0
|
作者
Oyerogba, Ezekiel Oluwagbemiga [1 ]
Alamu, Julius Adeyemi [1 ]
Olugbenro, Sunday Kola [2 ]
Sangodare, Tolulope Oyebanke [1 ]
机构
[1] Bowen Univ, Dept Accounting, Coll Management & Social Sci, PMB 284,Hosp Rd, Iwo, Osun State, Nigeria
[2] Oyo State Coll Educ, Bursary Dept, PMB 001, Lanlate, Oyo State, Nigeria
来源
JOURNAL OF TAX REFORM | 2024年 / 10卷 / 02期
关键词
tax incentives; foreign direct investment; gas utilization incentive; rural location incentive; INSTITUTIONS; FDI;
D O I
10.15826/jtr.2024.10.2.173
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
Governments worldwide have numerous tax instruments that can be deployed to promote effective tax revenue and multinational firms' location decisions. Existing literature mainly focuses on certain instruments associated with corporate income tax, such as tax allowances and holidays. Certainly, these instruments are of no benefit to companies that are not profitable hence, other types of incentives have been introduced. This study investigates the relationship between tax incentives and the inflow of foreign direct investment into listed manufacturing firms in Nigeria and contributes to the literature on the effectiveness of tax incentives in economic growth. We analyzed a survey response from 296 respondents purposively drawn among the relevant stakeholders in the manufacturing sector in Nigeria. The survey data were analyzed together with secondary data from 65 listed manufacturing firms from 2012 to 2021 using an unbalanced panel regression analysis method. Our results establish a significant relationship between tax incentives and foreign direct investment for all the three tax incentives categories. The robustness check analysis also established that apart from firm age, all firm-specific variables have a significant influence on foreign direct investment, indicating that tax incentive cannot drive massive investments in the manufacturing sector. Our results underscore the importance of equipping regulatory authorities and policymakers with a comprehensive understanding of the influences of tax incentives, non-tax incentives and other firm-specific variables on foreign direct investment. We posit that eliminating routine redundancy associated with the administration of tax incentives is to attract foreign funding to grow manufacturing companies in Nigeria.
引用
收藏
页码:355 / 380
页数:26
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