Entry in Tax Competition and Intergovernmental Transfer

12 Pages Posted: 14 Jul 2021

Date Written: May 11, 2020

Abstract

This paper derives an efficient intergovernmental transfer system within tax competition settings under the endogenization of the number of regions that engage in tax competition. In our theoretical model, two externalities arise. These include fiscal externalities and the externalities resulting from the endogenization of the number of regions. If a system is a full equalization system, inefficiency in the public input supply and the number of competing regions is resolved because two externalities can be internalized.

Keywords: Tax Competition; Intergovernmental Transfer; Region Entry; Public input

JEL Classification: H21; H23; H25; H71; H77

Suggested Citation

KIKUCHI, YUYA, Entry in Tax Competition and Intergovernmental Transfer (May 11, 2020). Available at SSRN: https://ssrn.com/abstract=3885080 or http://dx.doi.org/10.2139/ssrn.3885080

YUYA KIKUCHI (Contact Author)

Chubu University ( email )

Kasugai, Aichi
Japan

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