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Dewit, Gerda, 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: | Corporate tax; games; cross-border externalities; public infrastructure; |
| Academic Unit: | Faculty of Social Sciences > Economics, Finance and Accounting |
| Item ID: | 13085 |
| Identification Number: | 10.1111/ecin.12516 |
| Depositing User: | Gerda Dewit |
| Date Deposited: | 23 Jun 2020 14:24 |
| Journal or Publication Title: | Economic Inquiry |
| Publisher: | Wiley-Blackwell |
| Refereed: | Yes |
| Related URLs: | |
| URI: | https://mural.maynoothuniversity.ie/id/eprint/13085 |
| 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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