Abstract

http://ssrn.com/abstract=2017332
 
 

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Free Entry, Regulatory Competition, and Globalization


Kaz Miyagiwa


Emory University - Department of Economics

Yasuhiro Sato


Osaka University - Graduate School of Economics

March 7, 2012

ISER Discussion Paper No. 835

Abstract:     
This paper examines the optimal entry policy towards oligopoly in a globalized world. In an open economy free entry is socially suboptimal, but corrective tax policy to curb entry proves insufficient unless internationally harmonized. Thus, while conferring the gains from trade, globalization prevents countries from pursuing the optimal entry policy. When countries are small, the gains from trade dominate the losses from a suboptimal entry policy, but as markets grow the result is reversed, making trade inferior to autarky. Therefore, the need for tax harmonization grows as the world economy grows. This paper also contributes to the international tax competition literature through the discovery of the reverse home market effect.

Number of Pages in PDF File: 41

Keywords: entry policy, excessive entry, globalization, regulatory competition

JEL Classification: F15, H21, H77, L13

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Date posted: March 14, 2012  

Suggested Citation

Miyagiwa, Kaz and Sato, Yasuhiro, Free Entry, Regulatory Competition, and Globalization (March 7, 2012). ISER Discussion Paper No. 835. Available at SSRN: http://ssrn.com/abstract=2017332 or http://dx.doi.org/10.2139/ssrn.2017332

Contact Information

Kaz Miyagiwa (Contact Author)
Emory University - Department of Economics ( email )
1602 Fishburne Drive
Atlanta, GA 30322
United States
Yasuhiro Sato
Osaka University - Graduate School of Economics ( email )
1-7 Machikaneyama
Toyonaka, Osaka, 560-0043
Japan
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