Tariff Jumping Foreign Investment and Capital Taxation
Abstract
This paper reconsiders the welfare effects of "tariff jumping" direct investment if mobile capital is subjected to taxation. In contrast to the conventional wisdom, the receiving country may in this case gain from the incremental inflow of capital, as this diverts tax revenues from the rest of the world. In the case of perfect capital mobility, this possibility becomes a certainty. Our argument provides one rationale for a small country to levy a distorting tariff in a second best world in which capital taxes already exist.Download Info
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 260.Length:
Date of creation: 2000
Date of revision:
Handle: RePEc:ces:ceswps:_260
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Related research
Keywords: Capital taxation; tariff jumping; foreign direct investment;Other versions of this item:
- Dehejia, Vivek H. & Weichenrieder, Alfons J., 2001. "Tariff jumping foreign investment and capital taxation," Journal of International Economics, Elsevier, vol. 53(1), pages 223-230, February.
References
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- Huizinga, Harry & Nielsen, Soren Bo, 1997.
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Arijit Mukherjee & Udo Broll, 2001. "Export and direct investment as a signal in global markets," Keele Department of Economics Discussion Papers (1995-2001) 2001/09, Department of Economics, Keele University.
- Gilbert, John & Tower, Edward, 2002. "Protectionism, labor mobility, and immiserizing growth in developing economies," Economics Letters, Elsevier, vol. 75(1), pages 135-140, March.
- Nitesh Saha & John Gilbert, 2004. "Immiserizing Growth in a Developing Economy Export Enclave," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 3(3), pages 217-224, December.
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