On tax competition, public goods provision and jurisdictions' size

Patrice Pieretti and Skerdilajda Zanaj

Journal of International Economics, 2011, vol. 84, issue 1, 124-130

Abstract: In this paper, we analyze competition among jurisdictions to attract foreign capital through low taxes and public inputs that enhance firms' productivity. The competing jurisdictions are different in size and mobility of capital is costly. We find that for moderate mobility costs, small economies can attract foreign capital by supplying higher levels of public goods than larger jurisdictions, without practicing tax undercutting. The classical result that small jurisdictions are attractive because they engage in tax dumping is recovered only for high mobility costs of capital.

Keywords: Tax; competition; Public; goods; competition; Spatial; competition; Mobile; capital; Country; size (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (63)

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Related works:
Working Paper: On tax competition, public goods provision and jurisdictions’ size (2009)
Working Paper: On tax competition, public goods provision and jurisdictions' size (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:84:y:2011:i:1:p:124-130

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