Economics at your fingertips  

Governments at the bidding table

Johannes Van Biesebroeck ()

New Zealand Economic Papers, 2008, vol. 42, issue 2, 213-232

Abstract: The New Zealand government has recently indicated it will scale back its subsidy program for foreign firms investing in the country, except for screen productions, and divert the budgeted funds to an outward investment strategy. In sharp contrast, local governments have lately shown a much greater willingness to subsidize cultural or sporting events in order to boost local economic activity. I evaluate under what circumstances it makes sense for a government to subsidize private investments, paying particular attention to interjurisdictional competition. I show what factors determine equilibrium subsidy levels when governments enter a bidding war, and derive the expected welfare gain.

Keywords: FDI; externalities; interjurisdictional competition; subsidy (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) (text/html)
Access to full text is restricted to subscribers.

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:

Ordering information: This journal article can be ordered from

DOI: 10.1080/00779950809544422

Access Statistics for this article

New Zealand Economic Papers is currently edited by Gail Pacheco

More articles in New Zealand Economic Papers from Taylor & Francis Journals
Bibliographic data for series maintained by ().

Page updated 2020-02-12
Handle: RePEc:taf:nzecpp:v:42:y:2008:i:2:p:213-232