Partial Harmonization of Corporate Taxes in an Asymmetric Repeated Game Setting
AbstractThis paper investigates the conditions under which partial harmonization for capital taxation is sustained in a repeated interactions model of tax competition when there are three heterogenous countries with respect to their capital endowments. We show that regardless of the structure of the coalition (i.e., any group of countries), whether partial tax harmonization is sustainable or not crucially depends on the capital endowment of the median country relative to those of the large and small countries. The most noteworthy finding is that the closer the capital endowment of the median country to the average capital endowment of the large and small countries, the less likely is the tax harmonization including the median country to prevail and the more likely is the partial tax harmonization excluding the median country to prevail.
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.
Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3240.
Date of creation: 2010
Date of revision:
tax coordination; asymmetric countries; repeated game; tax competition;
Find related papers by JEL classification:
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
- H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
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.:
- Burbidge, John B. & James A. DePater & Gordon M. Meyers & Abhijit Sengupta, 1997.
"A Coalition-Formation Approach to Equilibrium Federations and Trading Blocs,"
American Economic Review,
American Economic Association, vol. 87(5), pages 940-56, December.
- John B. Burbidge & James A. DePater & Gordon M. Myers & Abhijit Sengupta, 1996. "A Coalition-formation Approach to Equilibrium Federations and Trading Block s," Department of Economics Working Papers 1996-05, McMaster University.
- Cardarelli, R. & Taugourdeau, E. & Vidal, J.-P., 1999.
"A Repeated Interactions Model of Tax Competition,"
99a34, Universite Aix-Marseille III.
- Cardarelli, R. & Taugourdeau, E. & Vidal, J.-P., 1999. "A Repeated Interactions Model of Tax Competition," Papiers d'Economie MathÃÂ©matique et Applications 1999.73, UniversitÃ© PanthÃ©on-Sorbonne (Paris 1).
- Peralta, Susana & van Ypersele, Tanguy, 2006.
"Coordination of capital taxation among asymmetric countries,"
Regional Science and Urban Economics,
Elsevier, vol. 36(6), pages 708-726, November.
- PERALTA, Susana & van YPERSELE, Tanguy, 2002. "Coordination of capital taxation among Asymmetric countries," CORE Discussion Papers 2002032, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- PERALTA, Susana & VAN YPERSELE, Tanguy, . "Coordination of capital taxation among asymmetric countries," CORE Discussion Papers RP -1971, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Peralta, Susana & van Ypersele, Tanguy, 2003. "Coordination of Capital Taxation Among Asymmetric Countries," CEPR Discussion Papers 3695, C.E.P.R. Discussion Papers.
- Konrad, Kai A. & Schjelderup, Guttorm, 1999.
"Fortress Building in Global Tax Competition,"
Journal of Urban Economics,
Elsevier, vol. 46(1), pages 156-167, July.
- Bucovetsky, S., 1991. "Asymmetric tax competition," Journal of Urban Economics, Elsevier, vol. 30(2), pages 167-181, September.
- Itaya, Jun-ichi & Okamura, Makoto & Yamaguchi, Chikara, 2008. "Are regional asymmetries detrimental to tax coordination in a repeated game setting?," Journal of Public Economics, Elsevier, vol. 92(12), pages 2403-2411, December.
- Catenaro, Marco & Vidal, Jean-Pierre, 2003. "Implicit tax co-ordination under repeated policy interactions," Working Paper Series 0259, European Central Bank.
- Wilson, John Douglas, 1991.
"Tax competition with interregional differences in factor endowments,"
Regional Science and Urban Economics,
Elsevier, vol. 21(3), pages 423-451, November.
- Wilson, J.D., 1990. "Tax Competition With Interregional Differences In Factor Endowments," Working Papers 4, John Deutsch Institute for the Study of Economic Policy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Julio Saavedra).
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.