PUBLIC INVESTMENT, TAXATION AND TRANSFER OF TECHNOLOGY

Iraklis Kollias, Sugata Marjit and Nickolas J. Michelacakis

Annals of Public and Cooperative Economics, 2019, vol. 90, issue 3, 441-456

Abstract: A low‐wage developing economy (South) is interested in accessing and attracting superior technology from a high‐wage developed economy (North) with firms having heterogeneous quality of technology. To improve upon the initial market equilibrium, which shows that relatively inefficient technologies will move to the South, the host government invests in infrastructure financed through taxing the foreign firms. We discuss the problem of existence of such a tax‐transfer mechanism within a balanced budget framework. We argue that such a policy can increase tax revenue as well as instigate the transfer of better quality technology. It turns out that this policy is more likely to be successful when the production concerns high‐value, high‐price products in low‐wage economies. Our results improve upon the conventional strategy of a tax break.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1111/apce.12231

Related works:
Working Paper: Public Investment, Taxation and Transfer of Technology (2017)
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:bla:annpce:v:90:y:2019:i:3:p:441-456

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1370-4788

Access Statistics for this article

Annals of Public and Cooperative Economics is currently edited by Marco Marini

More articles in Annals of Public and Cooperative Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().