Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185924
Authors: 
Keuschnigg, Christian
Year of Publication: 
2009
Citation: 
[Journal:] Swiss Journal of Economics and Statistics [ISSN:] 2235-6282 [Volume:] 145 [Year:] 2009 [Issue:] 4 [Pages:] 443-452
Abstract: 
In comparing the impact of corporate taxation and social insurance on foreign direct investment (FDI) and unemployment, the paper derives four main results: (i) the optimal size of the welfare state depends on the degree of risk-aversion, the unemployment rate and the excess burden of labor taxes. Unemployment partly reflects the country's exposure to globalization; (ii) corporate taxation and social insurance can have equivalent effects on unemployment and outbound FDI; (iii) while an increase in the corporate tax raises corporate tax revenue, it is likely to worsen total fiscal stance; (iv) a corporate tax should be used to contribute to welfare state financing only in exceptional cases.
Subjects: 
Corporate tax
foreign direct investment
unemployment
welfare state
JEL: 
F21
H21
H53
J64
J65
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Article

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