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Tax competition and the international distribution of firm ownership: an invariance result

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journal contribution
posted on 07.12.2016, 14:52 by Ben FerrettBen Ferrett, Ian Wooton
How does the international distribution of firm ownership affect the outcomes of tax/subsidy competition for mobile plants? As corporate ownership becomes increasingly globalised, this question becomes increasingly important for policy. We prove a strong invariance result in the context of the tax/subsidy competition between two host countries for a monopoly firm’s plant. Both the equilibrium plant location and the equilibrium tax/subsidy offers are independent of the international distribution of the firm’s ownership. The reason is that the tax/subsidy competition equalises the firm’s post-tax profits across countries, making owners of capital indifferent towards the location of production.

History

School

  • Business and Economics

Department

  • Economics

Published in

International Tax and Public Finance

Volume

17

Issue

(5)

Pages

Pp.518 - 531

Citation

FERRETT, B. and WOOTON, I., 2010. Tax competition and the international distribution of firm ownership: an invariance result. International Tax and Public Finance, 17 (5), pp.518-531.

Publisher

© Springer

Version

AM (Accepted Manuscript)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Publication date

2010

Notes

The final publication is available at Springer via: http://dx.doi.org/10.1007/s10797-009-9126-z.

ISSN

0927-5940

eISSN

1573-6970

Language

en

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Keywords

Exports