Header menu link for other important links
Competition for Foreign Capital under Asymmetric Revenue-Orientation
, Rupayan Pal
Published in Springer
Pages: 105 - 116

This paper develops a model of inter-regional competition for mobile capital considering that regions may have different revenue-orientations. It shows that, if regions are asymmetric in terms of revenue-orientation, the less revenue-orientated region obtains higher tax-revenue and higher social welfare in the equilibrium than the more revenue-oriented region. However, if regions are symmetric, the equilibrium tax- revenue and social welfare are higher in the case of greater revenue-orientation of regions. Moreover, regions spend on public-investment and end up with Pareto-inferior equilibrium outcome, regardless of whether regions are symmetric or asymmetric. It also analyses implications of public-investment spillover on equilibrium outcomes.

About the journal
JournalData powered by TypesetIndian Economic Review
PublisherData powered by TypesetSpringer
Open AccessNo
Concepts (6)
  •  related image
    Asymmetric revenue orientation
  •  related image
    Competition for foreign capital
  •  related image
    Prisoners dilemma
  •  related image
    Public investment
  •  related image
  •  related image