Who gains from capital market integration? Tax competition between unionized and non‐unionized countries
| Autor: | Yasuhiro Sato, Hikaru Ogawa, Toshiki Tamai |
|---|---|
| Rok vydání: | 2016 |
| Předmět: |
Factor market
Economics and Econometrics Labour economics Economic capital 05 social sciences jel:H73 jel:F21 Fixed capital jel:J51 Physical capital Capital Market Integration Capital Mobility Tax Competition Trade Unions Welfare Cost of capital Capital deepening 0502 economics and business Capital employed Economics Capital intensity 050207 economics 050205 econometrics |
| Zdroj: | Canadian Journal of Economics/Revue canadienne d'économique. 49:76-110 |
| ISSN: | 1540-5982 0008-4085 |
| Popis: | The welfare effects of capital market integration are examined under a model of tax competition with two asymmetric countries. The asymmetry is expressed through the labor market: one country has a perfect labor market whereas the other country is unionized. Our results show that the welfare effects of capital market integration are different depending on whether governments play an active role in attracting capital: in the absence of active governments, the capital market integration benefits the country with a competitive labor market and harms the unionized country. If the governments are active and compete for mobile capital using tax/subsidy, the market integration benefits both countries. The government fs incentive to participate in a tax/subsidy game is also examined in the integrated capital market. We find that the unionized country always prefers to participate in the tax/subsidy game, but the non-unionized country avoids the game if it is a capital importer. |
| Databáze: | OpenAIRE |
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