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Cross-Border Shopping: A Survey

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  • Andrés Leal

    ()

  • Julio López-Laborda

    ()

  • Fernando Rodrigo

    ()

Abstract

The aim of this paper is to undertake a review of the most important literature on the phenomenon of fiscally induced cross-border shopping. Following the presentation of the principal theoretical models, the study concentrates on applied literature. Firstly, the elements common to the diverse applications are described, and then, a detailed analysis of the research undertaken into cross-border shopping for alcoholic drinks, tobacco, fuel, and lotteries is provided, concluding with a reference to the interaction between cross-border purchases and those effected over the internet. The results achieved by the empirical research coincide and support the principal result of the theoretical literature: the tax differentials between neighboring territories induce consumers to purchase in the territory where taxation is lower, on the condition that the tax saving compensates for the transport costs associated with the travel made by the purchaser in order to take advantage of the lower taxation. Copyright International Atlantic Economic Society 2010

Suggested Citation

  • Andrés Leal & Julio López-Laborda & Fernando Rodrigo, 2010. "Cross-Border Shopping: A Survey," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 16(2), pages 135-148, May.
  • Handle: RePEc:kap:iaecre:v:16:y:2010:i:2:p:135-148:10.1007/s11294-010-9258-z
    DOI: 10.1007/s11294-010-9258-z
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Bishop, James, 2015. "Interacting effects of state cigarette taxes on smoking participation," MPRA Paper 66609, University Library of Munich, Germany.
    2. Jeffrey P. Thompson & Shawn M. Rohlin, 2013. "The effect of state and local sales taxes on employment at state borders," Finance and Economics Discussion Series 2013-49, Board of Governors of the Federal Reserve System (U.S.).
    3. repec:eee:indorg:v:55:y:2017:i:c:p:137-165 is not listed on IDEAS
    4. Christian Ben Lakhdar & Nicolas Gérard Vaillant & François-Charles Wolff, 2016. "Does smoke cross the border? Cigarette tax avoidance in France," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 17(9), pages 1073-1089, December.
    5. Thompson, Jeffrey P. & Rohlin, Shawn M., 2012. "The Effect of Sales Taxes on Employment: New Evidence From Cross-Border Panel Data Analysis," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(4), pages 1023-1041, December.
    6. repec:eee:eneeco:v:71:y:2018:i:c:p:171-185 is not listed on IDEAS
    7. Birg, Laura, 2015. "Cross-border or online: Tax competition with mobile consumers under destination and origin principle," Center for European, Governance and Economic Development Research Discussion Papers 265, University of Goettingen, Department of Economics.

    More about this item

    Keywords

    Cross-border shopping; Tax differences; H31; H32; H73; E62;

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy

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