Equilibrium Leadership in Tax Competition Models with Capital Ownership: A Rejoinder

Jean Hindriks and Y. Nishimura ()
Additional contact information
Y. Nishimura: Osaka University

No 2015021, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper reconciles two opposite results in the tax competition literature. On one side Kempf and Rota-Graziosi (J.Pub. Econ 94:768-776, 2010) and Hindriks and Nishimura (J. Pub Econ 121:66-68, 2015) have shown that the two Stackelberg outcomes prevail as the subgame perfect equilibria when capital is entirely owned by non-residents. On the other side Ogawa (Int. Tax Pub Fin 20:474-484, 2013) has shown that the simultaneous- move outcome prevails when capital is entirely owned by residents. We develop a model in which capital ownership can vary freely between these two polar cases. We show that there exists a unique degree of residential capital ownership such that the equilibrium switches from the Stackelberg to the simultaneous-move outcomes. The chance for the simultaneous-move outcome to prevail increases with the extent of asymmetry among regions.

Keywords: Endogenous timing; Tax competition; Capital ownership (search for similar items in EconPapers)
JEL-codes: C72 H30 H87 (search for similar items in EconPapers)
Date: 2015-05-31
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://sites.uclouvain.be/core/publications/coredp/coredp2015.html (application/pdf)

Related works:
Journal Article: Equilibrium leadership in tax competition models with capital ownership: a rejoinder (2017)
Working Paper: Equilibrium Leadership in Tax Competiton Models with Capital Ownership: A Rejoinder (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2015021

Access Statistics for this paper

More papers in LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Alain GILLIS ().