Regional centrality and tax competition for FDI

Darby, Julia and Ferrett, Ben and Wooton, Ian (2014) Regional centrality and tax competition for FDI. Regional Science and Urban Economics, 49. pp. 84-92. ISSN 0166-0462 (https://doi.org/10.1016/j.regsciurbeco.2014.08.006)

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Abstract

We examine a trade model where three countries compete for an exogenous number of firms. In our hub-and-spoke framework, one country is the hub through which all trade with and between spokes takes place. We establish the distribution of industrial activity in the absence of taxes and compare it to the equilibrium when countries compete to attract firms. Even when all countries are the same size, the centrality of the hub sets it apart. We determine how this trading pattern matters, comparing it to a structure with direct trade between all countries. The implications of international tax competition are also examined.

ORCID iDs

Darby, Julia ORCID logoORCID: https://orcid.org/0000-0003-4425-7222, Ferrett, Ben and Wooton, Ian ORCID logoORCID: https://orcid.org/0000-0001-5084-6379;
  • Item type:Article
    ID code:49078
    Dates:
    Date
    Event
    1 November 2014
    Published
    27 August 2014
    Published Online
    14 August 2014
    Accepted
    Keywords:corporate taxes, hub and spoke, trade costs, devolution, Finance, Economic Theory, Economics, Econometrics and Finance(all)
    Subjects:Social Sciences > Finance
    Social Sciences > Economic Theory
    Department:Strathclyde Business School > Economics
    Depositing user: Pure Administrator
    Date deposited:22 Aug 2014 10:28
    Last modified:07 Oct 2022 01:26
    Related URLs:
    URI:https://strathprints.strath.ac.uk/id/eprint/49078
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