Unionisation triggers tax incentives to attract foreign direct investment

Arbeitspapier

This paper analyses tax competition between a unionised and a non-unionised country for the location of an outside firm. We show that unionisation offers an extra incentive for the government to attract a foreign competitor to a concentrated domestic market, in order to affect the behaviour of the domestic union. This results in the unionised country's government offering a tax discount (or a subsidy premium) to the outside firm in excess of what is needed to compensate the investor for the higher union wage. In equilibrium, therefore, the unionised country can attract the outside firm even if it has other location disadvantages, such as a smaller home market.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Munich Discussion Paper ; No. 2008-10

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Business Taxes and Subsidies including sales and value-added (VAT) ; State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects ; Labor-Management Relations, Trade Unions, and Collective Bargaining: Public Policy
• Thema: tax competition ; trade unions ; foreign direct investment ; Steuerwettbewerb ; Gewerkschaftsmitgliedschaft ; Auslandsinvestition ; Steuervergünstigung ; Zwei-Länder-Modell ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Haufler, Andreas ; Mittermaier, Ferdinand
• Ereignis: Veröffentlichung
• (wer): Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
• (wo): München
• (wann): 2008

Weitere Informationen

• DOI: doi:10.5282/ubm/epub.3752
• Handle: http://hdl.handle.net/10419/104260
• URN: urn:nbn:de:bvb:19-epub-3752-2
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ