EconStor >
ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/26429
  

Full metadata record

DC FieldValueLanguage
dc.contributor.authorGomes, Pedroen_US
dc.contributor.authorPouget, Francoisen_US
dc.date.accessioned2008-09-11en_US
dc.date.accessioned2009-07-28T08:31:46Z-
dc.date.available2009-07-28T08:31:46Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/26429-
dc.description.abstractThe government's choices of the corporate tax rate and public investment are interdependent. In particular, they both respond positively to the other. Therefore, international tax competition not only drives corporate tax rates to lower levels but might also affect negatively the stock of public capital. We build a general equilibrium model that illustrates the relation between the two variables. We then add an element of international tax competition. Our simulations show that when international tax competition drives the statutory tax rate down from 45% to 30%, public investment is reduced by 0.4% of output at the steady state. The short run effect is three times higher. The second part of our study displays an empirical analysis that corroborates the main outcome of the model. We estimate two policy functions for 21 OECD countries and find that corporate tax rate and public investment are endogenous. More precisely, a decline of 15% in the corporate tax rate reduces public investment by 0.6% to 1.1% of GDP. We also find evidence that international competition operates on both policy tools.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 2384en_US
dc.subject.jelH0en_US
dc.subject.jelH26en_US
dc.subject.jelH54en_US
dc.subject.ddc330en_US
dc.subject.keywordTax competitionen_US
dc.subject.keywordcorporate taxen_US
dc.subject.keywordpublic investmenten_US
dc.subject.keywordpublic capitalen_US
dc.subject.stwUnternehmensbesteuerungen_US
dc.subject.stwSteuerwettbewerben_US
dc.subject.stwÖffentliche Investitionen_US
dc.subject.stwInfrastrukturinvestitionen_US
dc.subject.stwAllgemeines Gleichgewichten_US
dc.subject.stwOECD-Staatenen_US
dc.titleCorporate tax competition and the decline of public investmenten_US
dc.typeWorking Paperen_US
dc.identifier.ppn577509802en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

Files in This Item:
File Description SizeFormat
577509802.PDF500.3 kBAdobe PDF
No. of Downloads: Counter Stats
Show simple item record
Download bibliographical data as: BibTeX

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.