F23 - Multinational Firms; International BusinessReturn

The aim of this study is to investigate the relationship between foreign direct investment and economic growth in seven emerging countries. Past empirical studies have failed to estimate the long run relationship between the variables in these countries, which has created a gap in the literature. Data was collected from the United Nations Conference on Trade and Development and World Bank Indicator from 1990 to 2017, and the Johansen Fisher Panel Cointegration and Pairwise Dumitrescu Hurlin Panel Causality Tests were utilised to address the objective of the study. Consequently, the empirical results show that FDI, GDP per capita, growth rate and economic growth have a long run equilibrium relationship. Also, there is an existence of one-way feedback which runs from FDI to economic growth. Based on these findings, this study recommends among others that the policy makers in the emerging countries should ensure the sustainability of the rate of economic growth and embark on more foreign investment-oriented policies that would catalyse further attraction of FDI inflows into their economies.

Small and medium sized enterprises account for over 99% of all companies in Eu-ropean Union and have very important position in the EU economy in the area of growth and employment. However, they face great deal of obstacles, such as com-pliance costs of taxation, 28 different tax systems in Europe, difficult transfer pric-ing rules and so on. Further, compliance costs of taxation are regressive with regard to firm size and significantly higher in case of enterprises with foreign branch or subsidiary in comparison with enterprises which are not internationalized. Moreo-ver, compliance costs are increasing through strict and difficult transfer pricing rules among European countries. Therefore, taxes and new obligations should be carefully designed so that they can address the disproportionately high tax compli-ance burdens faced by those enterprises. Unfortunately, there does not exist a study determining compliance costs of transfer pricing issue in the literature. Therefore, the aim of paper is to determine compliance costs of transfer pricing issues in case of SMEs. The results are based on the questionnaire distributed among Czech parent companies having subsidiaries in Europe and Czech subsidiaries having a parent company in Europe. Based on the results we can conclude that costs for managing of transfer pricing requirements can reach from EUR 6,430 to 7,704 per year, time needed for this issue between 27 and 35 working days and in case of comparison with corporate tax collection it represents between 3.90 % and 12.74 %.