The Nexus between Government Size, Tax Burden and Private Investment

The link between government size, the tax burden and private investment was assessed in the paper. Following research methods were used: the systemic, logical and comparative analysis of scientific literature, the descriptive statistics analysis, hierarchical cluster analysis, correlation analysis. The empirical analysis focuses on the data of the European Union (EU) countries. The study covers 2003 – 2012 years. The cross–sectional data is used.The research results showed that government size and the tax burden cannot be treated as the only detrimental factors for private investment. In the further research, the aspects of quality of the government and the government spending effectiveness should be included into the analysis.