Does Tax Competition Increase Infrastructural Disparity Among Jurisdictions?

17 Pages Posted: 9 Jan 2018

See all articles by Yutao Han

Yutao Han

Universite du Luxembourg

Patrice Pieretti

Universite du Luxembourg; Centre de Recherche en Économie Appliquée (CREA)

Benteng Zou

Centre de Recherche en Économie Appliquée (CREA)

Date Written: February 2018

Abstract

This paper investigates whether an economy that lags behind in infrastructure compared with other countries can make up its shortfall when it competes for foreign direct investments. The main message of the paper is that jurisdictional competition can enable the lagging country to reduce the infrastructural gap if capital mobility is sufficiently high and the gap is not too large. Further, we show that size asymmetry reinforces (weakens) the effect in reducing the infrastructural disparity resulting from interjurisdictional competition when the lagging economy is small (large).

Suggested Citation

Han, Yutao and Pieretti, Patrice and Zou, Benteng, Does Tax Competition Increase Infrastructural Disparity Among Jurisdictions? (February 2018). Review of International Economics, Vol. 26, Issue 1, pp. 20-36, 2018, Available at SSRN: https://ssrn.com/abstract=3098548 or http://dx.doi.org/10.1111/roie.12301

Yutao Han (Contact Author)

Universite du Luxembourg ( email )

L-1511 Luxembourg
Luxembourg

Patrice Pieretti

Universite du Luxembourg ( email )

L-1511 Luxembourg
Luxembourg

Centre de Recherche en Économie Appliquée (CREA) ( email )

Campus Limpertsberg
162A, avenue de la Faïencerie
Luxembourg, 1511
Luxembourg

Benteng Zou

Centre de Recherche en Économie Appliquée (CREA) ( email )

Campus Limpertsberg
162A, avenue de la Faïencerie
Luxembourg, 1511
Luxembourg

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