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Cost asymmetry and taxation : implications for multinational activity
Author(s)
Date Issued
2003-04
Date Available
2009-07-22T16:20:00Z
Abstract
This paper presents a novel approach to examining multinationality which features the associated proximity versus concentration trade-off. Borrowing an important tool that is widely used in the
strategic trade policy literature, I employ a third country model to examine the effects of a specific policy initiative and a firm-specific advantage on individual firm configuration. The main findings
are that taxes hurt the inefficient firm more, causing it to choose the exporting rather than the multinational method of serving markets. Consequently, multinational production is associated with cost-efficiency while the inefficient firm is more likely to be an exporter.
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
Series
UCD Centre for Economic Research Working Paper Series
WP03/11
Subject – LCSH
International business enterprises--Taxation
Commercial policy
Business enterprises--Cost effectiveness
International business enterprises--Econometric models
Language
English
Status of Item
Not peer reviewed
This item is made available under a Creative Commons License
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