Template-Type: ReDIF-Paper 1.0

Author-Name: Maksym Ivanyna
Author-X-Name-First: Maksym
Author-X-Name-Last: Ivanyna

Title: Tax competition and governmental efficiency: Theory and evidence
	
Abstract: This paper studies the impact of a government's efficiency on the
taxation policy of a state. Namely, we claim that the countries are
different both in the way they tax capital and the way they spend
the collected revenue. We build a model of 2 countries competing for
foreign investment, government of one of them is more efficient than
the other one, which means that it is able to produce more public
good out of the same revenue. We show that the country with the
more efficient government will charge higher income tax from firms.
The theoretical predictions are then tested on a sample of OECD
countries, years 1996-2005. In general, empirical results are in line
with the theory.
Length:  34 pages
Creation-Date:  2008-06
File-URL: http://www.bgpe.de/texte/DP/059_ivanyna.pdf
File-Format: Application/pdf
File-Function: First version, 2008
Number: 059
Classification-JEL: F23, H25, H32, H54, H71, H73
Keywords: international taxation, public ¯nance, asymmetric equilibrium, tax competition
Handle: RePEc:bav:wpaper:059_ivanyna