Are small countries leaders of the European tax competition?

Nicolas Chatelais and Mathilde Peyrat ()
Additional contact information
Mathilde Peyrat: ESSEC Business School et Centre d'Economie de la Sorbonne, https://centredeconomiesorbonne.univ-paris1.fr

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: The aim of this paper is to develop a better understanding of the literature dealing with strategic fiscal behaviours of small EU countries using estimations of tax reaction functions of competing national governments. Deriving a simple model of tax competition in a Nash and Stackelberg game, we use panel data and tools from spatial econometrics to examine the role of small countries in tax competition within the enlarged European Union. We find that interactions are stronger among smaller EU countries than between larges ones and rates set in small countries influence those in big countries. Finally, small countries located in the centre of the EU have more influence on tax policies choices of big countries than small countries located in the periphery of EU

Keywords: Strategic interactions; tax behaviours; spatial econometrics; European Union; tax competition; small countries (search for similar items in EconPapers)
JEL-codes: E62 F21 F22 F23 H30 H32 H73 H77 R12 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2008-10
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (11)

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ftp://mse.univ-paris1.fr/pub/mse/CES2008/Bla08058.pdf (application/pdf)

Related works:
Working Paper: Are Small countries leaders of the European tax competition ? (2008)
Working Paper: Are Small countries leaders of the European tax competition ? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:bla08058

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