Arbeitspapier
Tax competition for foreign direct investment
We analyze tax competition between two countries of unequal size trying to attract a foreign-owned monopolist. When regional governments have only a lump-sum profit tax (subsidy) at their disposal, but face exogenous and identical transport costs for imports, then both countries will always offer to subsidize the firm. Furthermore, the maximum subsidy is greater in the larger region. However, if countries are given an additional instrument of either a tariff or a consumption tax, then the larger country will no longer underbid its smaller rival and its best offer may involve a positive profit tax. In both cases the equilibrium outcome is that the firm locates in the larger market, paying a profit tax that is increasing in the relative size of this market and which is made greater when the tariff (consumption tax) instrument is permitted.
- Sprache
-
Englisch
- Erschienen in
-
Series: Diskussionsbeiträge - Serie II ; No. 329
- Klassifikation
-
Wirtschaft
Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Trade Policy; International Trade Organizations
Economic Integration
Multinational Firms; International Business
Business Taxes and Subsidies including sales and value-added (VAT)
State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects
- Thema
-
tax competition
economic integration
foreign direct investment
regional location
Steuerwettbewerb
Subvention
Auslandsinvestition
Multinationales Unternehmen
Transportkosten
Standortwettbewerb
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Haufler, Andreas
Wooton, Ian
- Ereignis
-
Veröffentlichung
- (wer)
-
Universität Konstanz, Sonderforschungsbereich 178 - Internationalisierung der Wirtschaft
- (wo)
-
Konstanz
- (wann)
-
1997
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Haufler, Andreas
- Wooton, Ian
- Universität Konstanz, Sonderforschungsbereich 178 - Internationalisierung der Wirtschaft
Entstanden
- 1997
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