Federal tax autonomy and the limits of cooperation
Kessing, Sebastian G., Konrad, Kai A. and Kotsogiannis, Christos. (2006) Federal tax autonomy and the limits of cooperation. Journal of Urban Economics, Vol.59 (No.2). pp. 317-329. ISSN 0094-1190Full text not available from this repository.
Official URL: http://dx.doi.org/10.1016/j.jue.2005.10.002
We consider the hold-up problem between a foreign direct investor and the government(s) in a host country with weak governmental structure and lack of power to commit. Using "Nash threats," we show that an efficient investment level can be sustained for a sufficiently high discount factor and ask whether a vertically disintegrated government structure makes collusion more or less sustainable. We show that collusion between the government and the investor is easier to sustain if the host country is vertically more integrated. or if the different vertical layers of government can commit to fixed tax-sharing rules. (c) 2005 Elsevier Inc. All rights reserved.
|Item Type:||Journal Article|
|Subjects:||H Social Sciences > HC Economic History and Conditions
H Social Sciences > HT Communities. Classes. Races
|Divisions:||Faculty of Social Sciences > Economics|
|Journal or Publication Title:||Journal of Urban Economics|
|Number of Pages:||13|
|Page Range:||pp. 317-329|
|Access rights to Published version:||Restricted or Subscription Access|
|Funder:||European Commission (EC), Deutsche Forschungsgemeinschaft (DFG)|
|Grant number:||EIF 011364 (EC), KO 1437/8-1 (DFG)|
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