Please use this identifier to cite or link to this item:
https://hdl.handle.net/2440/108985
Citations | ||
Scopus | Web of Science® | Altmetric |
---|---|---|
?
|
?
|
Type: | Journal article |
Title: | Tax competition in a simple model with heterogeneous firms: how larger markets reduce profit taxes |
Author: | Haufler, A. Stähler, F. |
Citation: | International Economic Review, 2013; 54(2):665-692 |
Publisher: | Wiley |
Issue Date: | 2013 |
ISSN: | 0020-6598 1468-2354 |
Statement of Responsibility: | Andreas Haufler, Frank Stähler |
Abstract: | We set up a simple two-country model of tax competition where firms with different productivity decide in which location to produce and sell output. In thismodel, a unique, asymmetric Nash equilibrium is shown to exist, provided that countries are sufficiently different with respect to their exogenous market size. Sorting of firms occurs in equilibrium, as the smaller country levies the lower tax rate and attracts the low-cost firms. A simultaneous expansion of both markets that raises the profitability of firms intensifies tax competition and causes both countries to reduce their tax rates, despite higher corporate tax bases. |
Rights: | © (2013) by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association |
DOI: | 10.1111/iere.12010 |
Published version: | http://dx.doi.org/10.1111/iere.12010 |
Appears in Collections: | Aurora harvest 3 Economics publications |
Files in This Item:
File | Description | Size | Format | |
---|---|---|---|---|
RA_hdl_108985.pdf Restricted Access | Restricted Access | 649.95 kB | Adobe PDF | View/Open |
Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.