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Integration and Tax Competition: An Empirical Study of OECD Countries

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Author Info
Hansson, Åsa () (Department of Economics, Lund University)
Olofsdotter, Karin () (Department of Economics, Lund University)
Abstract

This paper studies the effects of integration on capital taxation in a number of OECD countries. Unlike most previous papers on the subject, we combine key features from the new economic geography theory with the standard tax competition framework. We consider effective as well as statutory corporate tax rates and include several measures of agglomeration forces in the analysis. Our empirical findings provide some support for both models. We find that increased integration has a negative effect on corporate tax rates while agglomeration forces influence tax rates positively, though the latter result is sensitive to how agglomeration is measured.

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Paper provided by Lund University, Department of Economics in its series Working Papers with number 2005:4.

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Length: 45 pages
Date of creation: 21 Jan 2005
Date of revision: 09 Feb 2005
Handle: RePEc:hhs:lunewp:2005_004

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Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
Phone: +46 +46 222 0000
Fax: +46 +46 2224613
Web page: http://www.nek.lu.se/
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Related research
Keywords: tax competition; new economic geography; economic integration;

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Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
F15 - International Economics - - Trade - - - Economic Integration
H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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