State tax competition for foreign direct investment: A winnable war?

• 成果类型: Article
• 署名作者: Davies, RB
• 署名单位: University of Oregon
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2004.10.005
• 发表日期: 2005
• 页码: 498-512
• 关键词: Tax competition; Foreign direct investment; Multinational corporations

摘要

When a multinational firm invests in a country, potential host states compete for the firm by offering firm-specific tax reductions. Critics blast such incentives for transferring rents to the firm without affecting the investment decision. In fact, these incentives are tied to the firm's use of domestic inputs and therefore affect output decisions. With positive interstate spillovers, a federal subsidy is necessary to reach the national optimum without tax competition. Competition reduces state taxes and the need for federal subsidies. Also, under competition, the firm locates efficiently. Therefore, tax competition does not always reduce national welfare. (c) 2004 Elsevier B.V All rights reserved.