Competing for capital when labor is heterogeneous

Yasuhiro Sato and Jacques Thisse

No 2005061, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: This paper investigates the impacts of capital mobility and tax competition in a setting with imperfect matching between firms and workers. The small country always gains and the large country always loses from tax competition, thus implying tax competition leads to redistribution from the large to the small country. However, the large country always attains a higher utility than does the small country. These results imply that our model encapsulates both the “importance of being small” as well as the “importance of being large”. We also show that tax harmonization leads to redistribution from the large to the small country.

Keywords: fiscal competition; local labor markets; capital mobility (search for similar items in EconPapers)
JEL-codes: F21 H32 J31 (search for similar items in EconPapers)
Date: 2005-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://sites.uclouvain.be/core/publications/coredp/coredp2005.html (text/html)

Related works:
Journal Article: Competing for capital when labor is heterogeneous (2007)
Working Paper: Competing for capital when labor is heterogeneous (2007)
Working Paper: Competing for Capital When Labour is Heterogeneous (2007)
Working Paper: Competing for Capital when Labor is Heterogeneous (2007)
Working Paper: Competing for Capital when Labor is Heterogeneous (2007)
Working Paper: Competing for capital when labor is heterogeneous (2006)
Working Paper: Competing for capital when labor is heterogeneous (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2005061

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