Arbeitspapier

Competition for firms in an oligopolistic industry: do firms or countries have to pay?

We set up a model of generalised oligopoly where two countries of different size compete for an exogenous, but variable, number of identical firms. The model combines a desire by national governments to attract internationally mobile firms with the existence of location rents that arise even in a symmetric equilibrium where firms are dispersed. As economic integration proceeds, equilibrium taxes decline, switching from positive to negative levels, and then rise as trade costs fall even further. A range of trade costs is identified where economic integration raises the welfare of the small country, but lowers welfare in the large country.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 1976

Klassifikation
Wirtschaft
Business Taxes and Subsidies including sales and value-added (VAT)
State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects
Economic Integration
Multinational Firms; International Business
Thema
Direktinvestition
Steuerwettbewerb
Subvention
Standortwettbewerb
Oligopol
Wirtschaftsintegration
Wohlfahrtseffekt
Zwei-Länder-Modell
Theorie

Ereignis
Geistige Schöpfung
(wer)
Haufler, Andreas
Wooton, Ian
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2007

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Haufler, Andreas
  • Wooton, Ian
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2007

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