Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92574
Authors: 
Miyagiwa, Kaz
Sato, Yasuhiro
Year of Publication: 
2012
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 835
Abstract: 
This paper examines the optimal entry policy towards oligopoly in a globalized world. In an open economy free entry is socially suboptimal, but corrective tax policy to curb entry proves insufficient unless internationally harmonized. Thus, while conferring the gains from trade, globalization prevents countries from pursuing the optimal entry policy. When countries are small, the gains from trade dominate the losses from a suboptimal entry policy, but as markets grow the result is reversed, making trade inferior to autarky. Therefore, the need for tax harmonization grows as the world economy grows. This paper also contributes to the international tax competition literature through the discovery of the reverse home market effect.
Subjects: 
Entry Policy
Excessive entry
Globalization
Regulatory competition
JEL: 
F15
H21
H77
L13
Document Type: 
Working Paper

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