EconPapers    
Economics at your fingertips  
 

The role of infrastructure investment and factor productivity in international tax competition

Patricia Sanz-Córdoba

Economic Modelling, 2020, vol. 85, issue C, 30-38

Abstract: In this paper we use data from 30 developed economies from 1999 to 2014 to analyse the importance of infrastructure investments and factor productivity for explaining international capital tax competition. Our results indicate the existence of intensive tax competition in effective average corporate taxation during this period. It is also suggested that non-tax variables of third countries affect a country's corporate tax policy. Countries whose direct competitors have better infrastructures or are more productive compensate with lower capital taxation. In this way, their infrastructure investment and productivity-enhancing policies are used as strategic substitutes for capital taxation. With regard to the characteristics of closest competitors, we find that corporate tax competition is fiercer among countries that are characterized by similar infrastructure investments and geographical proximity.

Keywords: International tax competition; Infrastructure investment; Total factor productivity; Spatial fiscal interactions; Spatial durbin model (search for similar items in EconPapers)
JEL-codes: C13 E62 H20 H87 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999318313531
Full text for ScienceDirect subscribers only

Related works:
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:eee:ecmode:v:85:y:2020:i:c:p:30-38

DOI: 10.1016/j.econmod.2019.05.003

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-07-08
Handle: RePEc:eee:ecmode:v:85:y:2020:i:c:p:30-38