Detail publikace

The Supply of Foreign Direct Investment Incentives: Subsidy Competition in an Oligopolistic Framework

Autor: doc. PhDr. Tomáš Havránek Ph.D.,
Typ: Články v impaktovaných časopisech
Rok: 2009
Číslo: 2
Publikováno v: Prague Economic Papers, 2009(2), 131--155
Místo vydání:
Klíčová slova: Investment incentives, Subsidy competition, Productivity spillovers, Oligopoly, Foreign direct investment, Multinational corporations
JEL kódy: F12, F21, F23, H25, H71, H87
Abstrakt: This paper examines the microeconomic motivation of governments to
provide tax incentives for foreign direct investment. 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
suggests that, in the oligopolistic framework, supranational coordination can
either decrease or increase the supply of subsidies. Further, in the setting of subsidy regulation, the host country's corporate income tax rate has an ambiguous eect on the provision of incentives.




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