Cost asymmetry and taxation : implications for multinational activity

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Title: Cost asymmetry and taxation : implications for multinational activity
Authors: Porter, Lynda
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Date: Apr-2003
Online since: 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/Report no.: 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
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Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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