Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81118
Authors: 
Han, Yutao
Pieretti, Patrice
Zou, Benteng
Year of Publication: 
2013
Series/Report no.: 
Working Papers, Center of Mathematical Economics 486
Abstract: 
Many authors demonstrate that the tax gap resulting from tax competition increases with the size asymmetry of the competing countries. Consequently, increasing country-size disparities exacerbates the inefficiency of tax competition.The aim of this note is to show that this classical view has no general validity if we consider that countries compete not only in taxes but also in the provision of infrastructure. The simple model we develop for this purpose demonstrates that the effect of size disparity on efficiency depends crucially on the degree of international capital mobility.
Subjects: 
tax competition
social welfare
inefficiency
infrastructure
JEL: 
H21
H73
F21
Document Type: 
Working Paper

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