Public procurement in the presence of capital taxation
The paper considers governments' public procurement decision as a way of influencing industry structure. In a federation in which capital is mobile and capital taxation is harmonized, a home bias in public procurement can potentially be explained as an effort to increase the capital intensity of local production and to attract taxable capital. As a result, governments may prefer domestic firms to more efficient foreign firms.
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- Kim, In-Gyu, 1994. "Price-preference vs. tariff policies in government procurement auctions," Economics Letters, Elsevier, vol. 45(2), pages 217-222, June.
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