Preferential policies for attracting foreign investment with tax reduction as the main content are important means of FDI competition practice in reality,but the effect of tax policies is questionable.Based on the theory of New New Economic Geography,this paper discusses the influence of tax burden on FDI flow from the perspective of supporting system supply.Theoretical research shows that:(1)Reducing the tax burden of the host country can promote the inflow of FDI,but there is an effective"threshold"for policy implementa-tion;(2)The improvement of the supply quality of the supporting systems in the host country with institution-al environment and social trust as the main body will lead to the increase of the critical productivity of foreign capital migration enterprises and weaken the negative impact of tax burden on FDI inflows.On this basis,em-pirical tests were conducted based on the China Industrial Enterprise Database from 1998 to 2013.The results showed that in the practice of regional FDI competition in China,while the role of tax policies was greatly weakened,the role of supporting institutional supply was becoming stronger.The improvement of regional in-stitutional environment and the increase of social trust not only contribute to the expansion of FDI scale,but al-so to the improvement of FDI quality.From this,it can be seen that tax reduction is not the optimal policy choice for expanding investment.A sound legal system,a good social trust system,and high-quality introduc-tion of foreign investment should be adopted.
万方数据
维普
