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来源类型 | Discussion paper |
规范类型 | 论文 |
来源ID | DP13573 |
DP13573 Targeting FDI | |
Ian Wooton; Ben Ferrett | |
发表日期 | 2019-03-07 |
出版年 | 2019 |
语种 | 英语 |
摘要 | We study the tax/subsidy competition between the governments of two countries to attract the FDI projects of two firms. We assume that governments lack the capacity to target every potential inward investor with a tailored fiscal offer. Consequently, each government is constrained to bid for a single firm. In this environment, we show that subsidy competition, where both governments bid for the same firm, arises only if there is uncertainty over which country offers the more profitable location for the firm’s plant. Intuitively, such uncertainty leads to both governments believing that they might win the subsidy competition. In contrast, when the characteristics of the two countries are common knowledge, subsidy competition never arises in equilibrium, as the losing country would prefer to target the other firm. We also explore some of the welfare implications of governmental targeting constraints. |
主题 | International Trade and Regional Economics ; Public Economics |
关键词 | Foreign direct investment Tax and subsidy competition Efficiency |
URL | https://cepr.org/publications/dp13573 |
来源智库 | Centre for Economic Policy Research (United Kingdom) |
资源类型 | 智库出版物 |
条目标识符 | http://119.78.100.153/handle/2XGU8XDN/542430 |
推荐引用方式 GB/T 7714 | Ian Wooton,Ben Ferrett. DP13573 Targeting FDI. 2019. |
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