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Weltwirtschaftliches Archiv

, Volume 134, Issue 2, pp 263–279 | Cite as

Tax policy on foreign direct investment in the presence of cross-hauling

  • Sajal Lahiri
  • Yoshiyasu Ono
Articles

Abstract

Tax Policy on Foreign Direct Investment in the Presence of Cross-Hauling. — The authors develop a partial equilibrium model of foreign direct investment (FDI) in which identical foreign firms locate themselves in a host country to compete with internationally mobile domestic firms in non-tradeable oligopolistic markets for two differentiated commodities. The host country, which is small in the market for FDI, uses lumpsum subsidy (tax) to encourage (discourage) FDI. There is unemployment in the host country. Under this framework, the authors analyse the effect of discriminatory and uniform subsidies on the inflow/outflow of domestic and foreign firms and on employment. They also derive some properties of optimal subsidies.

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Zusammenfassung

Steuerpolitik und auslÄndische Direktinvestitionen bei Cross-Hauling. — Die Verfasser entwickeln ein Modell des partiellen Gleichgewichts für auslÄndische Direktinvestitionen (FDI), in dem identische auslÄndische Firmen sich in einem Gastland niederlassen, um mit international mobilen heimischen Firmen auf oligopolistischen MÄrkten um zwei unterschiedliche, aber international nicht handelbare Erzeugnisse zu konkurrieren. Das Gastland, das auf dem Markt für FDI klein ist, benutzt pauschale Subventionen (Steuern), um FDI zu fördern (behindern). Im Gastland herrscht Arbeitslosigkeit. In diesem Rahmen untersuchen die Verfasser die Wirkung von diskriminierenden und einheitlichen Subventionen auf den Zugang/Weggang von heimischen und fremden Finnen und auf die BeschÄftigung. Sie leiten auch einige Eigenschaften optimaler Subventionen ab.

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Copyright information

© Institut fur Weltwirtschaft an der Universitat Kiel 1998

Authors and Affiliations

  • Sajal Lahiri
  • Yoshiyasu Ono

There are no affiliations available

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