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Tax Competition, Imperfect Capital Mobility and the gain from non-preferential agreements

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  • Kaushal Kishore

    (Southern Methodist University)

Abstract

The gain to competing governments from entering into binding non-preferential tax agree- ments (that prevents discriminatory taxation in favor of mobile capital) depends on the extent of capital mobility between jurisdictions. In particular the gain is increasing in the cost of re- location of capital and the fraction of the domestic tax base which is relatively immobile. We show this in a symmetric model of capital tax competition between two governments where all capital is imperfectly mobile and di¤er only in their cost of relocation.

Suggested Citation

  • Kaushal Kishore, 2008. "Tax Competition, Imperfect Capital Mobility and the gain from non-preferential agreements," Departmental Working Papers 0804, Southern Methodist University, Department of Economics.
    • Handle: RePEc:smu:ecowpa:0804
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    Cited by:

    1. Kaushal Kishore, 2016. "A Note on Home Bias and the Gain from Non-Preferential Taxation," Working Papers 201632, University of Pretoria, Department of Economics.

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    More about this item

    Keywords

    Tax Competition; Capital Mobility; Non-Preferential Regime.;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods

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