Riedl, Aleksandra, Rocha-Akis, Silvia. 2009. Testing the Tax Competition Theory: How Elastic are National Tax Bases in OECD Countries?, CESifo Working Paper No. 2669.

RIS

@MISC{Riedl2009,
title = {Testing the Tax Competition Theory: How Elastic are National Tax Bases in OECD Countries?, CESifo Working Paper No. 2669},
author = {Aleksandra Riedl and Silvia Rocha-Akis},
year = {2009},
url = {http://www.cesifo-group.de/pls/guestci/download/CESifo%20Working%20Papers%202009/CESifo%20Working%20Papers%20June%202009/cesifo1_wp2669.pdf},
language = {EN},
abstract = {To what extent do countries' corporate income tax (CIT) rates attract foreign tax bases? What are the revenue implications of a unilateral tax reduction when tax bases are internationally mobile? These questions are explored using a panel of annual data from 17 OECD countries spanning the period 1982 to 2005. We find significant international fiscal externalities in the form of CIT-induced resource flows. The magnitude, however, indicates that the extent of international corporate tax base mobility is rather modest. Moreover, we find that, on average, a unilateral CIT reduction results in a less-than-proportional increase in the CIT base, thus reducing CIT revenues. The results are robust across a wide range of specifications and point to potential gains from international tax policy coordination.},
}