regional governments have only a lump-sum profit tax (subsidy) at their disposal, but face exogenous and identical transport … costs for imports, then both countries will always offer to subsidize the firm. Furthermore, the maximum subsidy is greater …

are heterogeneous in their productivity levels. I show that the use of a small subsidy raises welfare in the FDI host … country, with the consumption gains from attracting more multinationals exceeding the direct costs of funding the subsidy … program through a tax on labor income. This welfare gain stems from a selection effect, whereby the subsidy induces only the …

The objective of this paper is to empirically assess the recently introduced models of subsidy competition based on the … ; Investment incentives ; Foreign direct investment ; Subsidy competition …

policy implications are: (1) the optimal subsidy increases with the percentage of home ownership; (2) the subsidy amount … increases with increased exports, but the subsidy rate decreases; and (3) some variables associated with decreasing home sales … are also associated with a higher probability of a positive subsidy …