Dewit, Gerda and Hynes, Kate and Leahy, Dermot (2018) Corporate tax games with cross-border externalities from public infrastructure. Economic Inquiry, 56 (2). pp. 1047-1063. ISSN 0095-2583

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Abstract

We construct a model of corporate tax competition in which governments also use public infrastructure investment to attract foreign direct investment, thus enhancing their tax bases. In doing so, we allow for cross-border infrastructural externalities. Depending on the externality, governments are shown to strategically over- or underinvest in infrastructure. We also examine how tax cooperation influences investment in infrastructure and find that welfare may be lower under tax cooperation than under tax competition; this is the case when infrastructure is very effective in raising the tax base and generates a large negative cross-border externality

Item Type:	Article
Keywords:	Multinational Firms, International Business; Publicly Provided Goods;
Academic Unit:	Faculty of Social Sciences > Economics, Finance and Accounting
Item ID:	11365
Identification Number:	https://doi.org/10.1111/ecin.12516
Depositing User:	Gerda Dewit
Date Deposited:	18 Oct 2019 09:31
Journal or Publication Title:	Economic Inquiry
Publisher:	Wiley-Blackwell
Refereed:	Yes
URI:	Publisher
Use Licence:	This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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