We address the problem of optimal form and timing of FDI subsidy, and the impact of competition on these. We find that … the optimal subsidy must include an element of discouragement against delaying the timing of the investment for the firm … subsidy. These results generate empirical predictions as the subsidy we are the most likely to see is the subsidy that speeds …

. Author applies the classical models of oligopoly to subsidy competition, endogenousing investment incentives, but leaving tax … rates exogenous. According to the conventional wisdom, subsidy competition leads to overprovision of incentives. This paper … subsidies. Further, in the setting of subsidy regulation, the host country's corporate income tax rate has an ambiguous effect …