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

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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:18 Jul 2021 01:38
      Related URLs:
      URI:https://strathprints.strath.ac.uk/id/eprint/49078
    CORE (COnnecting REpositories)