Exports, Foreign Direct Investment and the Costs of Corporate Taxation

Christian Keuschnigg

No 708, Working Papers from Oxford University Centre for Business Taxation

Abstract: This paper develops a model of a monopolistically competitive industry with extensive and intensive business investment and shows how these margins respond to changes in average and marginal corporate tax rates. Intensive investment refers to the size of a firm’s capital stock. Extensive investment refers to the firm’s production location and reflects the trade-off between exports and foreign direct investment as alternative modes of foreign market access. The paper derives comparative static effects of the corporate tax and shows how the cost of public funds depends on the measures of effective marginal and average tax rates and on the behavioral elasticities of extensive and intensive investment.

Keywords: Exports; foreign direct investment; corporate taxation; extensive and intensive investment; effective tax rates; costs of public funds (search for similar items in EconPapers)
JEL-codes: D21 F23 H25 L11 L22 (search for similar items in EconPapers)
Date: 2007
New Economics Papers: this item is included in nep-int and nep-pbe
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Related works:
Journal Article: Exports, foreign direct investment, and the costs of corporate taxation (2008)
Working Paper: Exports, Foreign Direct Investment and the Costs of Corporate Taxation (2007)
Working Paper: Exports, Foreign Direct Investment and the Costs of Coporate Taxation (2006)
Working Paper: Exports, Foreign Direct Investment and the Costs of Corporate Taxation (2006)
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