regional vs global financing strategies for us mnes：区域和全球融资策略的美国跨国企业.pdfVIP

Regional vs. Global Financing Strategies for U.S. MNEs Joseph P. Daniels Marquette University Walid Hejazi University of Toronto Marc von der Ruhr St. Norbert College Abstract Despite declining in 2001, foreign direct investment (FDI) surged during the 1990s. As a result, current levels of FDI flows are triple their 1990 levels. It is well documented in the literature that FDI occurs in large part among countries that are geographically close. It is also well established that the NAFTA had a significant impact on both U.S. FDI flows and hence FDI stocks. In addition, tax policies and tax treaties have been shown to be important drivers of U.S. FDI. The analysis presented in this paper confirms these earlier results. We extend the analysis, however, to show that tax treaties have a significant impact onfinancing patterns of U.S. MNE activities abroad. Based on these results, we argue that bilateral tax treaties should be an important part of trade agreements between the United States and Latin American partners in anticipation of a Free Trade Agreement of the Americas (FTAA). Special thanks for assistance and advice from James McGibany and participants at the Canada- United States Business Conference held at Indiana University and the Kelley School of Business Friday, April 11 – Saturday, April 12, 2003. I. Introduction Since the 1994-1995 peso crisis, a great deal of attention has been given to financial globalization and the destabilizing consequences of unbridled short-term capital flows. In spite of this attention, the process of financial globalization does not depend on the actions of short-term investors. Rather, as argued by Rugman (