In this paper, we have emphasized information problems which lead to home bias and insufficient amounts of capital inflows.

Even Though financial markets today show a high degree of integration, the world capital market is stil far from the textbook story of high capital mobility. The purpose of this paper is to highlight key sources of market failure in the context of international capital flows and to provide...

Tax incentives have been adopted worldwide to attract foreign direct investment (FDI) and its superior technology. However whether tax incentives can promote FDI productivity spillovers remains unknown. We develop a static computable general equilibrium (CGE) model of China to explore it. The...

This paper analyzes enhanced cooperation agreements in corporate taxation in a three country tax competition model where countries differ in size. We characterize equilibrium tax rates and the optimal tax responses due to the formation of an enhanced cooperation agreement. Conditions for...

We consider a collection of countries which attempt to maximize their corporate tax revenue, the latter being viewed as a function of Foreign Direct Investment (FDI) inflow and the Effective Average Tax Rate (EATR) which each country sets for itself. Under a model that assumes a direct influence...

This Working Paper contains some observations concerning the evolution of trade and trade-related policies in the Asia-Pacific region since the establishment in 1989 of the Trade Policy Review Mechanism (TPRM), whose goal is to improve the transparency of these policies. It also draws some...

Coordination of tax policies among policy makers is an often considered remedy against inefficiently low taxes on mobile tax bases induced by tax competition. Tax coordination may, however, not be particularly successful if some countries do not take part in the coordination. The outcome of such...

An empirical examination of uncertain tax policy is crucial to a full understanding of the interplay between taxes and investment, especially given the ambiguities in the limited theoretical literature. This article empirically investigates the impact on investment of volatility in effective tax...

This paper examines the relationship between capital tax competition amongst countries and the productivity spillover effects from foreign capital movements. An econometric model is constructed to test for the impact that domestic and foreign productivity shocks has on a country’s tax setting...