Tax evasion and competition
Using a Cournot oligopoly model with an endogenous number of firms and evasion of indirect taxes, this paper shows that more intense competition may have the negative side-effect of eroding tax revenues by increasing tax evasion. This will be the case if market entry costs decrease. A similar result will hold if marginal production costs fall and demand is either weakly concave or convex and inelastic. The desirable result of more competition, less evasion and higher tax revenues will be obtained if (a) marginal production costs fall and demand is convex and elastic or (b) the demand elasticity increases.
(This abstract was borrowed from another version of this item.)
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 58 (2011)
Issue (Month): 5 (November)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0036-9292|
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0036-9292|
References listed on IDEAS
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.:
- Gideon Yaniv, 1996. "Tax Evasion and Monopoly Output Decisions: Note," Public Finance Review, SAGE Publishing, vol. 24(4), pages 501-505, October.
- Inés Macho-Stadler & David Pérez-Castrillo, 2001.
"Settlement in Tax Evasion Prosecution,"
UFAE and IAE Working Papers
495.01, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Goerke, Laszlo & Runkel, Marco, 2006. "Profit Tax Evasion under Oligopoly with Endogenous Market Structure," National Tax Journal, National Tax Association, vol. 59(4), pages 851-57, December.
- Axel Dreher, 2002. "Does Globalization Affect Growth?," Development and Comp Systems 0210004, EconWPA, revised 04 Feb 2003.
- Ralph Bayer & Frank A Cowell, 2006.
"Tax Compliance and Firms’ StrategicInterdependence,"
STICERD - Distributional Analysis Research Programme Papers
81, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- Bayer, Ralph & Cowell, Frank, 2009. "Tax compliance and firms' strategic interdependence," Journal of Public Economics, Elsevier, vol. 93(11-12), pages 1131-1143, December.
- Ralph-C Bayer & Frank Cowell, 2006. "Tax Compliance and Firms' Strategic Interdependence," School of Economics Working Papers 2006-09, University of Adelaide, School of Economics.
- R Bayer & Frank Cowell, 2006. "Tax compliance and firms' strategic interdependence," LSE Research Online Documents on Economics 2680, London School of Economics and Political Science, LSE Library.
- Dixit, Avinash K, 1986. "Comparative Statics for Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-22, February.
- Katsoulacos, Yannis & Xepapadeas, Anastasios, 1995.
" Environmental Policy under Oligopoly with Endogenous Market Structure,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 97(3), pages 411-20, September.
- Katsoulacos, Yannis & Xepapadeas, Anastasios, 1994. "Environmental Policy Under Oligopoly with Endogenous Market Structure," CEPR Discussion Papers 955, C.E.P.R. Discussion Papers.
- Andrei Shleifer, 2004.
"Does Competition Destroy Ethical Behavior?,"
American Economic Review,
American Economic Association, vol. 94(2), pages 414-418, May.
- Sandmo, Agnar, 2005. "The Theory of Tax Evasion: A Retrospective View," National Tax Journal, National Tax Association, vol. 58(4), pages 643-63, December.
- Stephen Smith & Michael Keen, 2007.
"VAT Fraud and Evasion; What Do We Know, and What Can be Done?,"
IMF Working Papers
07/31, International Monetary Fund.
- Keen, Michael & Smith, Stephen, 2006. "VAT Fraud and Evasion: What Do We Know and What Can Be Done?," National Tax Journal, National Tax Association, vol. 59(4), pages 861-87, December.
- Marrelli, Massimo, 1984. "On indirect tax evasion," Journal of Public Economics, Elsevier, vol. 25(1-2), pages 181-196, November.
- Simeon Djankov & Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer, .
"The Regulation of Entry,"
19462, Harvard University OpenScholar.
- Simeon Djankov & Rafael La Porta & Florencio LopezdeSilanes & Andrei Shleifer, 2000. "The Regulation of Entry," NBER Working Papers 7892, National Bureau of Economic Research, Inc.
- Djankov, Simeon & La Porta, Rafael & Shleifer, Andrei & Lopez de Silanes, Florencio, 2001. "The regulation of entry," Policy Research Working Paper Series 2661, The World Bank.
- Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andre Shleifer, 2000. "The Regulation of Entry," Harvard Institute of Economic Research Working Papers 1904, Harvard - Institute of Economic Research.
- Djankov, Simeon & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2001. "The Regulation of Entry," Working Paper Series rwp01-015, Harvard University, John F. Kennedy School of Government.
- Djankov, Simeon & La Porta, Rafael & López-de-Silanes, Florencio & Shleifer, Andrei, 2001. "The Regulation of Entry," CEPR Discussion Papers 2953, C.E.P.R. Discussion Papers.
- Axel Dreher, 2006.
"Does globalization affect growth? Evidence from a new index of globalization,"
Taylor & Francis Journals, vol. 38(10), pages 1091-1110.
- Axel Dreher, 2005. "Does Globalization Affect Growth? Evidence from a new Index of Globalization," TWI Research Paper Series 6, Thurgauer Wirtschaftsinstitut, Universitï¿½t Konstanz.
- Andreoni, J. & Erard, B. & Feinstein, J., 1996.
9610r, Wisconsin Madison - Social Systems.
- Wang, Leonard F.S. & Conant, John L., 1988. "Corporate Tax Evasion and Output Decisions of the Uncertain Monopolist," National Tax Journal, National Tax Association, vol. 41(4), pages 579-81, December.
- Cremer, Helmuth & Gahvari, Firouz, 1992. "Tax Evasion and the Structure of Indirect Taxes and Audit Probabilities," Public Finance = Finances publiques, , vol. 47(Supplemen), pages 351-65.
- Joel Slemrod & Shlomo Yitzhaki, 2000.
"Tax Avoidance, Evasion, and Administration,"
NBER Working Papers
7473, National Bureau of Economic Research, Inc.
- Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
- Franzoni, Luigi Alberto, 2000. "Amnesties, Settlements and Optimal Tax Enforcement," Economica, London School of Economics and Political Science, vol. 67(266), pages 153-76, May.
- Shleifer, Andrei, 2004. "Does Competition Destroy Ethical Behavior?," Scholarly Articles 27867243, Harvard University Department of Economics.
- Kreutzer, David & Lee, Dwight R., 1988. "Tax Evasion and Monopoly Output Decisions: A Reply," National Tax Journal, National Tax Association, vol. 41(4), pages 583-84, December.
- Joel Slemrod, 2007. "Cheating Ourselves: The Economics of Tax Evasion," Journal of Economic Perspectives, American Economic Association, vol. 21(1), pages 25-48, Winter.
- Marrelli, M. & Martina, R., 1988. "Tax evasion and strategic behaviour of the firms," Journal of Public Economics, Elsevier, vol. 37(1), pages 55-69, October.
- Paolo M. Panteghini, 2000. "Tax Evasion and Entrepreneurial Flexibility," Public Finance Review, SAGE Publishing, vol. 28(3), pages 199-209, May.
- Bliss, Christopher & Di Tella, Rafael, 1997. "Does Competition Kill Corruption?," Journal of Political Economy, University of Chicago Press, vol. 105(5), pages 1001-23, October.
- Leonard F.S. Wang, 1990. "Tax Evasion and Monopoly Output Decisions with Endogenous Probability of Detection," Public Finance Review, SAGE Publishing, vol. 18(4), pages 480-487, October.
- Cremer, Helmuth & Gahvari, Firouz, 1993. "Tax evasion and optimal commodity taxation," Journal of Public Economics, Elsevier, vol. 50(2), pages 261-275, February.
- Helmuth Cremer & Firouz Gahvari, 1999. "Excise Tax Evasion, Tax Revenue, and Welfare," Public Finance Review, SAGE Publishing, vol. 27(1), pages 77-95, January.
- Virmani, Arvind, 1989. "Indirect tax evasion and production efficiency," Journal of Public Economics, Elsevier, vol. 39(2), pages 223-237, July.
When requesting a correction, please mention this item's handle: RePEc:bla:scotjp:v:58:y:2011:i:5:p:711-736. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
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.