Becker, Johannes and Riedel, Nadine (2012) Multinational Firms Mitigate Tax Competition. Centre for Business Taxation WP 12/24.
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In a recent study, Becker & Riedel (EER, 2012), we show that an increase in foreign taxes is associated with a decrease in domestic investment. In this paper, we explore the implications of this finding for tax competition. If foreign taxes decrease domestic investment instead of increasing it, the welfare properties of tax competition may fundamentally change. We build a model which demonstrates that an increase in the share of multinationals may mitigate tax competition in the sense that equilibrium taxes are higher. This finding contradicts the popular belief that multinational firms aggravate tax competition.
|Item Type:||Other Working Paper|
|Keywords:||Multinational Firms, Tax Competition|
|Centre:||Oxford University Centre for Business Taxation > CBT Working Papers|
|Date Deposited:||13 Mar 2013 11:01|
|Last Modified:||15 Oct 2015 02:18|
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