On tax competition, public goods provision and jurisdictions' size

• 成果类型: Article
• 署名作者: Pieretti, Patrice; Zanaj, Skerdilajda
• 署名单位: University of Luxembourg
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2011.01.005
• 发表日期: 2011
• 页码: 124-130
• 关键词: Tax competition; Public goods competition; spatial competition; Mobile capital; Country size

摘要

In this paper, we analyze competition among jurisdictions to attract foreign capital through low taxes and public inputs that enhance firms' productivity. The competing jurisdictions are different in size and mobility of capital is costly. We find that for moderate mobility costs, small economies can attract foreign capital by supplying higher levels of public goods than larger jurisdictions, without practicing tax undercutting. The classical result that small jurisdictions are attractive because they engage in tax dumping is recovered only for high mobility costs of capital. (C) 2011 Elsevier B.V. All rights reserved,