June 2013, Volume 20, Issue 3, pp 434-449,
Open Access This content is freely available online to anyone, anywhere at any time.
Date: 12 May 2012
Tax competition leading to strict environmental policy
We study tax competition when pollution matters. Most notably, we present a dynamic setting, where the supply of capital is endogenous. It is shown that tax competition may involve stricter environmental policy than the cooperative outcome.
- Bucovetsky, S., & Wilson, J. (1991). Tax competition with two tax instruments. Regional Science and Urban Economics, 21, 333–351. CrossRef
- Ha, J., & Sibert, A. (1997). Strategic capital taxation in large open economies with mobile capital. International Tax and Public Finance, 4(3), 243–262. CrossRef
- Hoel, M. (1997). Environmental policy with endogenous plant locations. Scandinavian Journal of Economics, 59, 17–32.
- Kanbur, R., Keen, M., & van Wijnbergen, S. (1995). Industrial competitiveness, environmental regulation and direct foreign investment. In I. Goldin & L. A. Winters (Eds.), The economics of sustainable development (pp. 289–302). Cambridge: Cambridge University Press. CrossRef
- Kim, J., & Wilson, J. (1997). Capital mobility and environmental standards: Racing to the bottom with multiple tax instruments. Japan and the World Economy, 9, 537–551. CrossRef
- Klein, P., Rios-Rull, V., & Quadrini, V. (2005). Optimal time consistent taxation with international mobility of capital. Advances in Macroeconomics, 5 (1), article 2. Available at: http://www.bepress.com/bejm/advances/vol5/iss1/art2.
- Krumm, R., & Wellisch, D. (1995). On the efficiency of environmental instruments in a spatial economy. Environmental and Resource Economics, 6, 87–98. CrossRef
- Lejour, A. M., & Verbon, H. A. A. (1997). Tax competition and redistribution in a two-country endogenous-growth model. International Tax and Public Finance, 4, 485–497. CrossRef
- Levinson, A. (1997a). A note on environmental federalism: Interpreting some contradictory results. Journal of Environmental Economics and Management, 33, 359–366. CrossRef
- Levinson, A. (1997b). Environmental regulations and industry location: International and domestic evidence. In J. Bhagwati & R. E. Hudec (Eds.), Economic analysis: Vol. 1. Fair trade and harmonization: prerequisites for free trade? (pp. 429–457). Cambridge: MIT Press.
- List, J. A., & Gerking, S. (2000). Regulatory federalism and environmental protection in the United States. Journal of Regional Science, 40(3), 453–471. CrossRef
- List, J. A., & Mason, C. F. (2001). Optimal institutional arrangements for tranboundary pollutants in a second-best world: Evidence from a differential game with asymmetric players. Journal of Environmental Economics and Management, 42, 277–296. CrossRef
- Markusen, J., Morey, E., & Olewiler, N. (1995). Competition in regional environmental policies when plant locations are endogenous. Journal of Public Economics, 56, 55–77. CrossRef
- Marsiliani, L., Renstrom, T., & Withagen, C. (2004) Environmental policy and interjurisdictional competition in a second-best world (Mimeo). University of Durham.
- Motta, M., & Thisse, J. F. (1994). Does environmental dumping lead to delocation? European Economic Review, 38, 563–576. CrossRef
- Oates, W. E. (2002). A reconsideration of environmental federalism. In J. A. List & A. De Zeeuw (Eds.), Recent advances in environmental economics (pp. 1–32). Cheltenham Glos: Edward Elgar.
- Oates, W. E., & Schwab, R. M. (1988). Economic competition among jurisdictions: Efficiency enhancing or distortion inducing? Journal of Public Economics, 35, 333–354. CrossRef
- Ogawa, H., & Wildasin, D. (2009). Think locally, act locally: Spillovers, spillbacks, and efficient decentralized policymaking. American Economic Review, 99(4), 1206–1217. CrossRef
- Rauscher, M. (1995). Environmental regulation and the location of polluting industries. International Tax and Public Finance, 2, 229–244. CrossRef
- Rauscher, M. (2000). Interjurisdictional competition and the environment. In H. Folmer & T. Tietenberg (Eds.), International yearbook of environmental and resource economics 2000/2001 (pp. 197–230). Cheltenham Glos: Edward Elgar.
- Ulph, A. (1994). Environmental policy, plant location and government protection. In C. Carraro (Ed.), Trade, innovation, environment. Dordrecht: Kluwer Academic.
- Venables, A. (1999). Economic policy and the manufacturing base: hysteresis in location. In R. Baldwin & J. Francois (Eds.), Dynamic issues in applied commercial analysis. Cambridge: CEPR and Cambridge University Press.
- Vig, N., & Kraft, M. (1994). Environmental policy in the 1990s. Congressional Quarterly, Washington DC.
- Wellisch, D. (1995). Locational choices of firms and decentralized environmental policy with various instruments. Journal of Urban Economics, 37, 290–310. CrossRef
- Wilson, J. D. (1997). Capital mobility and environmental standards: Is there a theoretical basis for a race to the bottom? In J. Bhagwati & R. E. Hudec (Eds.), Economic analysis: Vol. 1. Fair trade and harmonization: Prerequisites for free trade? (pp. 393–427). Cambridge: MIT Press.
- Tax competition leading to strict environmental policy
- Open Access
- Available under Open Access This content is freely available online to anyone, anywhere at any time.
International Tax and Public Finance
Volume 20, Issue 3 , pp 434-449
- Cover Date
- Print ISSN
- Online ISSN
- Springer US
- Additional Links
- Environmental policy
- Race to the bottom
- Pollution taxation
- Industry Sectors