In this paper, we analyse competition among jurisdictions to attract firms through low taxes oncapital and/or high level of public goods, which enhance firms’ productivity. We assume that thecompeting jurisdictions are different in (population) size and that the mobility of capital is...

Tax competition within the EU is fiercer than in the rest of the OECD with tax rates fallingrapidly. This paper analyzes tax responses of EU-15 countries to corporate tax changes in theEU-10 new member states as a function of their proximity to these new member states. Theaverage corporate tax...

In this paper, we provide an explanation of why privatization may attract foreign investorsinterested in entering a regional market. Privatization turns the formerly-public firm into a lessaggressive competitor since profit- maximizing output is lower than the welfare-maximizingone. The drawback...

Zentraler Gegenstand der Reformdiskussion ist die gemeindliche Steuerautonomie, diegegenwärtig vor allem durch die Wahl des Hebesatzes bei der Gewerbesteuer ausgeübtwird. Trotz aller Kritik halten die Gemeinden an der Gewerbesteuer fest. Wie der Vortragzeigt, ist dies letztlich durch den...

Corporate tax rates in Europe have been falling rapidly; as a consequence tax competition within the EU is fiercer than in the rest of the OECD. This paper analyzes heterogeneity in corporate tax rate changes between EU-15 countries as a function of the proximity to the EU-10 new member states....

This paper analyzes the impact of foreign investments on a small country's economy in the context of international competition. To that end, we model tax and infrastructure competition within a differential game framework between two unequally sized countries. The model accounts for the widely...

Multinational firms are known to shift profits and countries are known to compete over shifty profits. Two major principles for corporate taxation are Separate Accounting (SA) and Formula Apportionment (FA). These two principles have very different qualities when it comes to preventing profit...

Most studies of tax competition and the race to the bottom focus on potential host countries competing for mobile capital, neglecting the role of corporate tax planning and of home governments that facilitate this planning. This neglect in part reflects the narrow view frequently taken of the...

In debating Massachusetts business tax policy, protagonists have cited many different indicators purporting to assess the fairness, adequacy, and competitiveness of the Commonwealth's business taxes. These statistics actually reveal very little about the degree to which Massachusetts business...

This article studies the relationship between debt policies of multinational companies (MNCs) and governments' tax strategies. In the first part, it is shown that the ability to shift income from high- to low-tax countries affects MNCs' financial choices. In the second part we show how MNCs'...