Taxes and the location of production

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Title: Taxes and the location of production
Authors: Porter, Lynda
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Date: Apr-2003
Online since: 2010-01-19T14:54:34Z
Abstract: In this paper I examine dynamic tax competition in the context of an endogenous market structure. I therefore consider the tensions between proximity versus concentration, taxation and firm mobility while I also consider strategic interaction by governments (to induce multinationality) and asymmetric firms (for market share). The paper explores how strategic tax setting by rival governments may induce footloose firms to remain committed to initial location decisions, even when faced with adverse taxation regimes. In this instance, sunk costs resulting from the operation of additional plants may confer a first mover advantage on governments that can prevent relocation of firms.
Type of material: Working Paper
Publisher: University College Dublin. School of Economics
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP03/12
Subject LCSH: Industrial location
Business enterprises--Taxation
Fiscal policy
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Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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