Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83454
Authors: 
Havránek, Tomáš
Year of Publication: 
2009
Series/Report no.: 
IES Working Paper 7/2009
Abstract: 
The objective of this paper is to empirically assess the recently introduced models of subsidy competition based on the classical oligopoly theories, using both cross-sectional and panel data. Three crucial scenarios (including coordination, weak competition, and fierce competition) are tested employing OLS, iteratively re-weighted least squares, fixed effects, and Blundell-Bond estimator. The results suggest that none of the scenarios can be strongly supportedalthough there is some weak support for cooperation, and thus that empirical evidence is not in accordance with the tested models. Further, it seems that by means of FDI incentives countries try to compensate foreign investors for high wages or low productivity of their citizens.
Subjects: 
Panel data
Investment incentives
Foreign direct investment
Subsidy competition
JEL: 
C21
C23
F21
F23
H25
Document Type: 
Working Paper
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