Cross-border shopping in a federal economy
AbstractThe purpose of this paper is to consider an economy that incorporates cross-border shopping and where the different levels of government are concerned with the well-being of their citizens. We assume a federal economy with a central government and two regions with specific characteristics. Two kinds of externalities, horizontal and vertical, arise and we show the possibilities of internalising them. With the governments of symmetric regions behaving as Nash players, they would optimally set their tax rates and replicate the unitary nation optimum. Finally, we show how the central government as a Stackelberg leader can adjust its fiscal instruments so that the tax externalities are also internalised.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Regional Science and Urban Economics.
Volume (Year): 34 (2004)
Issue (Month): 4 (July)
Contact details of provider:
Web page: http://www.elsevier.com/locate/regec
Other versions of this item:
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
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.:
- Ohsawa, Yoshiaki, 1999. "Cross-border shopping and commodity tax competition among governments," Regional Science and Urban Economics, Elsevier, vol. 29(1), pages 33-51, January.
- Trandel, Gregory A., 1994. "Interstate commodity tax differentials and the distribution of residents," Journal of Public Economics, Elsevier, vol. 53(3), pages 435-457, March.
- Ravi Kanbur & Michael Keen, 1991.
"Jeux Sans Frontieres: Tax Competition and Tax Coordination when Countries Differ in Size,"
819, Queen's University, Department of Economics.
- Kanbur, Ravi & Keen, Michael, 1993. "Jeux Sans Frontieres: Tax Competition and Tax Coordination When Countries Differ in Size," American Economic Review, American Economic Association, vol. 83(4), pages 877-92, September.
- Nielsen, Soren Bo, 2001.
" A Simple Model of Commodity Taxation and Cross-Border Shopping,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 103(4), pages 599-623, December.
- Nielsen, Søren Bo, 1998. "A simple model of commodity taxation and cross-border shopping," Working Papers 13-1998, Copenhagen Business School, Department of Economics.
- Søren Bo Nielsen, . "A Simple Model of Commodity Taxation and Cross-Border Shopping," EPRU Working Paper Series 98-18, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
- Michael Keen, 1997.
"Vertical Tax Externalities in the Theory of Fiscal Federalism,"
IMF Working Papers
97/173, International Monetary Fund.
- Michael Keen, 1998. "Vertical Tax Externalities in the Theory of Fiscal Federalism," IMF Staff Papers, Palgrave Macmillan, vol. 45(3), pages 454-485, September.
- Bev Dahlby, 1996. "Fiscal externalities and the design of intergovernmental grants," International Tax and Public Finance, Springer, vol. 3(3), pages 397-412, July.
- You-Qiang Wang, 1999. "Commodity Taxes under Fiscal Competition: Stackelberg Equilibrium and Optimality," American Economic Review, American Economic Association, vol. 89(4), pages 974-981, September.
- Hoyt, William H., 2001. "Tax Policy Coordination, Vertical Externalities, and Optimal Taxation in a System of Hierarchical Governments," Journal of Urban Economics, Elsevier, vol. 50(3), pages 491-516, November.
- Hikaru Ogawa & Hiroshi Aiura, 2012. "Unit Tax versus Ad Valorem Tax: A Tax Competition Model with Cross-border Shopping," ERSA conference papers ersa12p428, European Regional Science Association.
- Braid, Ralph M., 2013. "State and local tax competition in a spatial model with sales taxes and residential property taxes," Journal of Urban Economics, Elsevier, vol. 75(C), pages 57-67.
- Todd M. Nesbit, 2005. "The Revenue Impacts of Cross-border Sales and Tourism: Wine and Liquor Taxation," Working Papers 05-12 Classification-, Department of Economics, West Virginia University.
- Aiura, Hiroshi & Ogawa, Hikaru, 2013. "Unit tax versus ad valorem tax: A tax competition model with cross-border shopping," Journal of Public Economics, Elsevier, vol. 105(C), pages 30-38.
- Diego Martínez, 2014. "Vertical externalities revisited: new results with public inputs and unit taxation," Working Papers 1403, Universidade de Vigo, GEN - Governance and Economics research Network.
- Dascher, Kristof & Haupt, Alexander, 2011.
"The political economy of regional integration projects at borders where poor and rich meet: The role of cross-border shopping and community sorting,"
Journal of Urban Economics,
Elsevier, vol. 69(1), pages 148-164, January.
- Kristof Dascher & Alexander Haupt, 2008. "The Political Economy of Regional Integration Projects at Borders where Rich and Poor Meet: The Role of Cross-Border Shopping and Community Sorting," CESifo Working Paper Series 2280, CESifo Group Munich.
- Yoskowitz, David W. & Pisani, Michael J., 2007. "Risk and reward: Currency substitution and acceptance of the Mexican peso by firms in the United States southern frontier," The Quarterly Review of Economics and Finance, Elsevier, vol. 47(3), pages 422-434, July.
- Kazuko Miyamoto, 2009. "A New Approach to Estimating Tax Interactions in Fiscal Federalism," Global COE Hi-Stat Discussion Paper Series gd08-053, Institute of Economic Research, Hitotsubashi University.
- Devereux, M.P. & Lockwood, B. & Redoano, M., 2007.
"Horizontal and vertical indirect tax competition: Theory and some evidence from the USA,"
Journal of Public Economics,
Elsevier, vol. 91(3-4), pages 451-479, April.
- Devereux, Michael P & Lockwood, Ben & Redoano, Michela, 2004. "Horizontal and Vertical Indirect Tax Competition: Theory and Some Evidence From the USA," CEPR Discussion Papers 4470, C.E.P.R. Discussion Papers.
- Devereux, Michael & Lockwood, Ben & Redoano, Michela, 2004. "Horizontal And Vertical Indirect Tax Competition : Theory And Some Evidence From The Usa," The Warwick Economics Research Paper Series (TWERPS) 704, University of Warwick, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.