Arbeitspapier

Exports, Foreign Direct Investment and the Costs of Corporate Taxation

This paper develops a model of a monopolistically competitive industry with extensive and intensive business investment and shows how these margins respond to changes in average and marginal corporate tax rates. Intensive investment refers to the size of a firm's capital stock. Extensive investment refers to the firm's production location and reflects the trade-off between exports and foreign direct investment as alternative modes of foreign market access. The paper derives comparative static effects of the corporate tax and shows how the cost of public funds depends on the measures of effective marginal and average tax rates and on the behavioral elasticities of extensive and intensive investment.

Language
Englisch

Bibliographic citation
Series: FIW Working Paper ; No. 5

Classification
Wirtschaft
Subject
Competitiveness
competitive model
industry
monopol
business investment
tax rates
corporate taxation
capital stock
effective average tax rate
effective marginal tax rate
elasticities of investment
FDI

Event
Geistige Schöpfung
(who)
Keuschnigg, Christian
Event
Veröffentlichung
(who)
FIW - Research Centre International Economics
(where)
Vienna
(when)
2007

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Keuschnigg, Christian
  • FIW - Research Centre International Economics

Time of origin

  • 2007

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