Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26159
Authors: 
Keuschnigg, Christian
Year of Publication: 
2007
Series/Report no.: 
CESifo working paper 2114
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: 
exports
foreign direct investment
corporate taxation
extensive and intensive investment
effective tax rates
costs of public funds
JEL: 
D21
F23
H25
L11
L22
Document Type: 
Working Paper

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