A Bargaining Model of Tax Competition

Seungjin Han and John Leach

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: This paper develops a model in which competing governments offer financial incentives to individual firms to induce the firms to locate within their jurisdictions. Equilibrium is described under three specifications of the supplementary taxes. There is no misallocation of capital under two of these specifications, and there might or might not be capital misallocation under the third. This result contrasts strongly with that of the standard tax competition model, which does not allow governments to treat firms individually. That model almost always finds that competition among governments leads to the misallocation of capital.

Pages: 0 pages
Date: 2005-12-02, Revised 2007-12-04
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://socserv.mcmaster.ca/han/research/finaloffer12.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://socserv.mcmaster.ca/han/research/finaloffer12.pdf [302 Moved Temporarily]--> https://socialsciences.mcmaster.ca/han/research/finaloffer12.pdf)

Related works:
Journal Article: A bargaining model of tax competition (2008)
Working Paper: A Bargaining Model of Tax Competition (2007)
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: https://EconPapers.repec.org/RePEc:ubc:pmicro:han-05-12-02-10-57-12

Access Statistics for this paper

More papers in Microeconomics.ca working papers from Vancouver School of Economics
Bibliographic data for series maintained by Maureen Chin ().