Objectives of governments in tax competition: Role of capital supply elasticity
| Autor: | Wenming Wang, Hikaru Ogawa |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
Economics and Econometrics
Tax competition 05 social sciences Price elasticity of supply Microeconomics Physical capital Capital accumulation Marginal cost of capital schedule Capital deepening 0502 economics and business Economics Capital intensity 050207 economics Finance Indirect tax 050205 econometrics |
| Zdroj: | International Review of Economics & Finance. 54:225-231 |
| ISSN: | 1059-0560 |
| DOI: | 10.1016/j.iref.2017.08.010 |
| Popis: | This study examines the choice of governments' policy objectives in tax competition with an endogenous capital supply. Our results confirm the following scenarios. (i) The welfare-maximizing region completely deviates from its primary goal and maximizes tax revenue when the capital supply elasticity, with respect to the interest rate, is low. (ii) The welfare-maximizing region pursues its primary goal and moderately maximizes welfare when the capital supply elasticity is high. In case (ii), the extent of welfare maximization orientation increases with the capital supply elasticity. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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