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dc.contributor.authorDavies, Ronald B.
dc.contributor.authorEckel, Carsten
dc.date.accessioned2007-10-22T20:53:50Z
dc.date.available2007-10-22T20:53:50Z
dc.date.issued2007-03
dc.identifier.urihttp://hdl.handle.net/1794/5116
dc.description40 p.en
dc.description.abstractThis paper models tax competition for mobile firms that are differentiated by the amount of labor needed to cover fixed costs. Because tax competition affects the distribution of firms, it affects both relative equilibrium wages across countries and equilibrium prices. These in turn influence the equilibrium number of firms. From the social planner's perspective, optimal tax rates are harmonized, providing the optimal number of firms, and set such that income is efficiently distributed between private and public consumption. As is common in tax competition models, in the Nash equilibrium tax rates are inefficiently low, yielding underprovision of public goods. Furthermore, there exist a variety of situations in which equilibrium tax rates differ. As a result, too many firms enter the market as governments compete to be the low-tax, high-wage country. This illustrates a new distortion from tax competition and provides an additional benefit from tax harmonization.en
dc.format.extent203032 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoen_USen
dc.publisherUniversity of Oregon, Dept of Economicsen
dc.relation.ispartofseriesUniversity of Oregon Economics Department Working Papers ; 2007-6en
dc.subjectTax competitionen
dc.subjectForeign direct investmenten
dc.subjectTax harmonizationen
dc.titleTax Competition for Heterogeneous Firms with Endogenous Entryen
dc.typeWorking Paperen


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