Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/121006
Authors: 
Keuschnigg, Christian
Year of Publication: 
2007
Series/Report no.: 
FIW Working Paper 5
Abstract: 
This paper develops a model of a monopolistically competitive industry with extensive and intensive business investment and shows how these margins respond to changes in average and marginal corporate tax rates. Intensive investment refers to the size of a firm's capital stock. Extensive investment refers to the firm's production location and reflects the trade-off between exports and foreign direct investment as alternative modes of foreign market access. The paper derives comparative static effects of the corporate tax and shows how the cost of public funds depends on the measures of effective marginal and average tax rates and on the behavioral elasticities of extensive and intensive investment.
Subjects: 
Competitiveness
competitive model
industry
monopol
business investment
tax rates
corporate taxation
capital stock
effective average tax rate
effective marginal tax rate
elasticities of investment
FDI
Document Type: 
Working Paper

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