Centre for Development Economics
Department of Economics, Delhi School of Economics


Tax Competition, Imperfect Capital Mobility and the gain from non-preferential agreements


Kaushal Kishore

Southern Methodist University, Dallas, Texas

Thursday, 25th April 2013 at 3:00 PM

Venue : Seminar Room (First Floor)
Department of Economics, Delhi School of Economics

All are cordially invited


The gain to competing governments from entering into binding non-preferential tax agreements (that prevents discriminatory taxation in favor of mobile capital) depends on the extent of capital mobility between jurisdictions. In particular the gain is increasing in the cost of relocation of capital and the fraction of domestic tax base that is relatively immobile. We show this in a symmetric model of capital tax competition between two governments where all capital is imperfectly mobile and differ in their cost of relocation.


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