Does Tax Competition Increase Infrastructural Disparity Among Jurisdictions?
17 Pages Posted: 9 Jan 2018
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: 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
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