We study the welfare effects of non-binding advance price announcements. Applying a differentiated Bertrand model with horizontal products and asymmetric information, we find that such announcements can help firms to gain information on each other thereby allowing them to achieve higher profits....

Corporate tax levels have fallen substantially in Europe during the last decades. A broad literature has identified tax competition as one reason for this decline in corporate tax levels. However, none of these studies explicitly asks the question whether tax competition within regions is...

Fiscal federalism in Germany is characterized by lacking sub-national tax autonomy and intensive fiscal equalization. Due to a sunset clause, the current equalization system has to be renegotiated by the year 2019. Against this backdrop, this contribution studies the reform preferences of...

Does globalization restrict the leeway for national budgetary policy? With the help of cluster and discriminant analysis this study provides evidence on the basis of the experience of OECD countries since the 1970s. Four budgetary dimensions are included in the analysis: tax structure,...

The paper considers governments' public procurement decision as a way of influencing industry structure. In a federation in which capital is mobile and capital taxation is harmonized, a home bias in public procurement can potentially be explained as an effort to increase the capital intensity of...

We analyze a two-period modell where risk-averse students divide their time between risky education, leisure, and work. The educated can migrate. Wagetax financed transfer to students acts as an insurance, and increases both investment in education and demand for leisure. We drive sufficient...

In a common market with costless mobility of all factors, regional governments can attract mobile firms by granting subsidies which must be financed out of wage taxes on mobile labour. Since firms locate where subsidies are highest and workers settle where taxes are lowest, government are forced...

In this paper the impact of the corporate tax systems of the 15 EU-member states on the investment and the financing decision of an US multinational corporation is analysed. The calculation of the resulting effective marginal tax rates (EMTR) closely follow the model of King and Fullerton. There...

This paper is concerned with fiscal externalities arising from local taxation of a mobile factor. Using a panel of more 1100 local jurisdictions it provides empirical evidence on how the local tax rate as well as the tax rate in the neighborhood affect the local tax base. The results support the...

11 European countries now operate IP Box regimes that provide substantially reduced rates of corporate tax for income derived from important forms of intellectual property. We incorporate these policies into forward-looking measures of the cost of capital, effective marginal tax rates and...