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Integration and Tax Competition: An Empirical Study of OECD Countries

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  • 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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Bibliographic Info

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/en
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Keywords: tax competition; new economic geography; economic integration;

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  1. Bretschger, Lucas & Hettich, Frank, 2002. "Globalisation, capital mobility and tax competition: theory and evidence for OECD countries," European Journal of Political Economy, Elsevier, vol. 18(4), pages 695-716, November.
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  17. Haufler,Andreas, 2008. "Taxation in a Global Economy," Cambridge Books, Cambridge University Press, number 9780521047593, April.
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Cited by:
  1. Siroën, Jean-Marc & Brami Celentano, Alexandrine, 2007. "Mondialisation et politique fiscale au Brésil," Economics Papers from University Paris Dauphine 123456789/284, Paris Dauphine University.
  2. Osterloh, Steffen & Debus, Marc, 2012. "Partisan politics in corporate taxation," European Journal of Political Economy, Elsevier, vol. 28(2), pages 192-207.
  3. Michael Devereux & Simon Loretz, 2012. "What do we know about corporate tax competition?," Working Papers 1229, Oxford University Centre for Business Taxation.

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