Country size and tax competition for foreign direct investment

Article Abstract:

The tax competition strategies between two dissimilar countries which are vying for the investment of a foreign-owned firm are analyzed. Governments which offer subsidies are often those which can offer only a lump-sum profit tax and have similar transport costs for imports. A firm could be induced to settle in a country with a bigger market where it can impose a greater producer price. If the size of its market is sufficiently large and in an equilibrium condition, a larger country will likely receive the investment and could even succeed in imposing a positive tax.

Competition (Economics), Industrial locations, Industrial location

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Tax incentives for import-substituting foreign investment: does signaling play a role?

Article Abstract:

A signaling model of tax incentives in promoting import-substituting foreign investment showed that there is a positive correlation between tax incentives and country risk and its degree of openness. However, tax incentives show a negative correlation with past foreign direct investment (FDI) and size of the market. Signaling considerations may be considered a significant determinant of the host country policy regarding foreign investments.

Public Finance Activities, Economics, Research and Development in the Social Sciences and Humanities, Corporate Tax Investment Credit, Investment tax credit

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Preferential trade agreements and tax competition for foreign direct investment

Article Abstract:

Impact of free trade agreements on foreign direct investments and governments' tax policies is analyzed.

United States, Tax policy, Commercial treaties, Trade agreements, Foreign direct investment

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