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Country size and tax policy for international joint ventures in an integrated market

  • Sanjo, Yasuo
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    We investigate international joint ventures in an integrated market using a two-country model with asymmetric sizes. We show that although the domestic firm in the small country is less efficient, it is possible that the government of the small country imposes a higher tax than that of the large country. Moreover, we show that even if the domestic firm in the large country is less efficient, a joint venture by this firm and the foreign firm could be more productive, and the foreign firm could prefer to form a joint venture partnership with the domestic firm in the large country.

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    File URL: http://www.sciencedirect.com/science/article/pii/S1059056012000925
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    Article provided by Elsevier in its journal International Review of Economics & Finance.

    Volume (Year): 27 (2013)
    Issue (Month): C ()
    Pages: 37-53

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    Handle: RePEc:eee:reveco:v:27:y:2013:i:c:p:37-53
    Contact details of provider: Web page: http://www.elsevier.com/locate/inca/620165

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