Tax Competition – Greenfield Investment versus Mergers and Acquisitions

Johannes Becker and Clemens Fuest

No 2247, CESifo Working Paper Series from CESifo

Abstract: In this paper, we analyze tax competition in a model where investor firms have the choice between two types of investment, greenfield investment and mergers and acquisitions. We show that the coexistence of these two types of investment intensifies tax competition in comparison to the case where there is only greenfield investment. If a specific tax on acquisitions is available, this result changes. Then, tax competition is mitigated compared to the pure greenfield case. The existence of an acquisition tax may even lead to corporate overtaxation.

Keywords: corporate taxation; mergers and acquisitions; tax competition (search for similar items in EconPapers)
JEL-codes: F23 H25 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Tax competition -- Greenfield investment versus mergers and acquisitions (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2247

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