Competition in Taxes and IPR

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Title: Competition in Taxes and IPR
Authors: Davies, Ronald B.Han, YutaoHynes, KateWang, Yong
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Date: Jun-2020
Online since: 2020-07-24T14:37:57Z
Abstract: We examine competition for foreign direct investment when governments compete in tax incentives along with intellectual property rights (IRPs) protection. Higher IPRs result in a lower probability of the multinational enterprise (MNE) being imitated and thus higher expected profits and tax revenues, all else equal. We show that, from the perspective of competing hosts, equilibrium IPRs are too high while taxes are too low. Coordination between jurisdictions can therefore lower the multinational's expected payoff, providing a rationale for why during recent trade negotiations FDI home countries complain about low IPRs in some locations while not pushing for them to be centrally determined.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Start page: 1
End page: 20
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP2020/19
Copyright (published version): 2020 the Authors
Keywords: Tax competitionFDIIPRsImitation
metadata.dc.subject.classification: F23; H25; 034
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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