Does Foreign Capital Increase Tax Revenue: The Turkish Case.
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We examine the effect of the foreign direct investment (FDI) on taxes paid for Turkey with a special focus on the differentials between firms operating with different technology levels. We utilize a comprehensive dataset for Turkish manufacturing firms over 2004-2012 period and employ generalized method of moments methodology. The results of the study confirm that foreign affiliation increase the taxes paid by the firms. We find a bigger impact of FDI on taxation for high-technology firms than medium or low technology firms. © 2016, Econjournals. All rights reserved.