A bargaining model of tax competition
AbstractThis paper develops a model in which competing governments offer financial incentives to induce individual firms to locate within their jurisdictions. Equilibrium is described under three specifications of the supplementary taxes. There is no misallocation of capital under two of these specifications, and there might or might not be capital misallocation under the third. This result contrasts strongly with that of the standard tax competition model, which does not allow governments to treat firms individually. That model finds that competition among governments almost always leads to capital misallocation.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Public Economics.
Volume (Year): 92 (2008)
Issue (Month): 5-6 (June)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/505578
Other versions of this item:
- Seungjin Han & John Leach, 2007. "A Bargaining Model of Tax Competition," Department of Economics Working Papers 2007-09, McMaster University.
- Han, Seungjin & Leach, John, 2005. "A Bargaining Model of Tax Competition," Microeconomics.ca working papers han-05-12-02-10-57-12, Vancouver School of Economics, revised 04 Dec 2007.
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H4 - Public Economics - - Publicly Provided Goods
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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