Capital Mobility—a resource curse or blessing? How, when, and for whom?
AbstractThis paper investigates which of the two types of countries—resource-rich or resource-poor—gains from capital market integration and capital tax competition. We develop a framework involving vertical linkages through resource-based inputs as well as international fiscal linkages between resource-rich and resource-poor countries. Our analysis shows that capital market integration causes capital flows from the latter to the former and thus improves production efficiency and global welfare. However, such gains accrue only to resource-poor countries, and capital mobility might even negatively affect resource-rich countries. In response to capital flows, the governments of both types of countries have an incentive to tax capital. We thus conclude that such taxation enables resource-rich countries to exploit their efficiency gains through capital market integration and become winners in the tax game.
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 Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 12063.
Length: 35 pages
Date of creation: Oct 2012
Date of revision:
Contact details of provider:
Postal: 11th floor, Annex, Ministry of Economy, Trade and Industry (METI) 1-3-1, Kasumigaseki Chiyoda-ku, Tokyo, 100-8901
Web page: http://www.rieti.go.jp/
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-20 (All new papers)
- NEP-IFN-2012-10-20 (International Finance)
- NEP-PBE-2012-10-20 (Public Economics)
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.:
- SATO, Yasuhiro & THISSE, Jacques-François, .
"Competing for capital when labor is heterogeneous,"
CORE Discussion Papers RP
-1992, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Yasuhiro Sato & Jacques-Francois Thisse, 2006. "Competing for capital when labor is heterogeneous," CIRJE F-Series CIRJE-F-456, CIRJE, Faculty of Economics, University of Tokyo.
- Sato, Yasuhiro & Thisse, Jacques-François, 2007. "Competing for Capital When Labour is Heterogeneous," CEPR Discussion Papers 6186, C.E.P.R. Discussion Papers.
- Yasuhiro, SATO & Jacques-François, THISSE, 2005. "Competing for capital when labor is heterogeneous," Discussion Papers (ECON - DÃ©partement des Sciences Economiques) 2005045, Université catholique de Louvain, Département des Sciences Economiques.
- SATO, Yasuhiro & THISSE, Jacques-François, 2005. "Competing for capital when labor is heterogeneous," CORE Discussion Papers 2005061, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Dhammika Dharmapala & James R. Hines Jr., 2006.
"Which Countries Become Tax Havens?,"
NBER Working Papers
12802, National Bureau of Economic Research, Inc.
- Elitzur, Ramy & Mintz, Jack, 1996. "Transfer pricing rules and corporate tax competition," Journal of Public Economics, Elsevier, vol. 60(3), pages 401-422, June.
- Hikaru Ogawa & Yasuhiro Sato & Toshiki Tamai, 2010. "Who gains from capital market integration: Tax competition between unionized and non-unionized countries," Discussion Papers in Economics and Business 10-18, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
- Peralta, Susana & van Ypersele, Tanguy, 2005. "Factor endowments and welfare levels in an asymmetric tax competition game," Journal of Urban Economics, Elsevier, vol. 57(2), pages 258-274, March.
- Matsumoto, Mutsumi, 1998. "A note on tax competition and public input provision," Regional Science and Urban Economics, Elsevier, vol. 28(4), pages 465-473, July.
- Peter Egger & Tobias Seidel, 2011. "Tax competition, trade liberalization, and imperfect labour markets," Oxford Economic Papers, Oxford University Press, vol. 63(4), pages 722-739, December.
- Noriaki Matsushima & Toshihiro Matsumura, 2003. "Mixed oligopoly and spatial agglomeration," Canadian Journal of Economics, Canadian Economics Association, vol. 36(1), pages 62-87, February.
- Bretschger, Lucas & Valente, Simone, 2012. "Endogenous growth, asymmetric trade and resource dependence," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 301-311.
- Frederick van der Ploeg, 2011.
"Natural Resources: Curse or Blessing?,"
Journal of Economic Literature,
American Economic Association, vol. 49(2), pages 366-420, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (NUKATANI Sorahiko).
If references are entirely missing, you can add them using this form.