Tax competition, capital mobility, and innovation in the public sector

Michael Rauscher

No 54, Thuenen-Series of Applied Economic Theory from University of Rostock, Institute of Economics

Abstract: The paper analyses the impact of tax competition on innovation in the public sector. It is shown that the effects of increased mobility of the tax base on innovation and growth are ambiguous. The negative relationship is more likely, however. Moreover, it is shown that a Leviathan government may be induced to spend a larger share of its budget on unproductive activities.

Keywords: tax competition; economic growth; innovation; Leviathan competition; North-South model (search for similar items in EconPapers)
JEL-codes: H21 H7 O31 O41 (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:roswps:54

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