State Tax Competition for Foreign Direct Investment: A Winnable War?

dc.contributor.authorDavies, Ronald B.
dc.date.accessioned2003-08-12T19:01:21Z
dc.date.available2003-08-12T19:01:21Z
dc.date.issued2000-05-01
dc.description.abstractWhen a multinational firm invests in a country, potential host states compete for the firm by offering firm-specific tax reductions. Critics blast such incentives as a prisoner’s dilemma that transfers rents to the firm without affecting the investment decision. In fact, these incentives are tied to the firm’s use of domestic inputs indicating that incentives affect output decisions. If there exist positive interstate spillovers, a federal subsidy is necessary to reach the national optimum without tax competition. Competition reduces state taxes and thus the need for federal subsidies. Also, under competition, the firm locates in the nation’s preferred location. Therefore, tax competition offers two means of increasing national welfare, indicating that it is not a simple prisoner’s dilemma.en
dc.format.extent0 bytes
dc.format.mimetypeapplication/pdf
dc.identifier.urihttps://hdl.handle.net/1794/68
dc.language.isoen_US
dc.publisherUniversity of Oregon, Dept. of Economicsen
dc.relation.ispartofseriesUniversity of Oregon Economics Department Working Papers;2000-4
dc.subjectInternational economicsen
dc.subjectInternational factor movementsen
dc.subjectMultinational firmsen
dc.subjectPublic economicsen
dc.subjectBusiness taxes and subsidiesen
dc.subjectUrban, rural, and regional economicsen
dc.subjectProduction analysis and firm locationen
dc.subjectGovernment policiesen
dc.subjectRegulatory policies
dc.titleState Tax Competition for Foreign Direct Investment: A Winnable War?en
dc.typeWorking Paperen

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