Exports, Foreign Direct Investment and the Costs of Corporate Taxation

Christian Keuschnigg

No 5, FIW Working Paper series from FIW

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: Competitiveness; competitive model; industry; monopol; business investment; tax rates; corporate taxation; capital stock; effective average tax rate; effective marginal tax rate; elasticities of investment; FDI (search for similar items in EconPapers)
Pages: 29
Date: 2007-06
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 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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Persistent link: https://EconPapers.repec.org/RePEc:wsr:wpaper:y:2007:i:005

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