G2TT
来源类型Discussion paper
规范类型论文
来源IDDP13573
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
URLhttps://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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