Structural fund, endogenous move and commitment
Carsten Eckel (),
Yutao Han (),
Kate Hynes and
Jin Zhang ()
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Yutao Han: University of International Business and Economics
Jin Zhang: University of International Business and Economics
International Tax and Public Finance, 2021, vol. 28, issue 2, No 9, 465-482
Abstract In this paper, we extend the study on combined tax and infrastructure competition by endogenizing the timing of decisions made by asymmetric countries. We consider how a structural fund affects the endogenous move decision and show that the poor country prefers to be a follower only when the production function is sufficiently concave. We also analyse the effect of the structural fund on total welfare and design a commitment game to ensure that the socially optimal outcome is achieved.
Keywords: Structural fund; Endogenous move; Commitment; Social welfare (search for similar items in EconPapers)
JEL-codes: C72 F21 H21 H73 (search for similar items in EconPapers)
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