International Tax and Public Finance

, Volume 22, Issue 6, pp 1028–1039 | Cite as

Further analysis on leadership in tax competition: the role of capital ownership—a comment

  • Hubert KempfEmail author
  • Grégoire Rota-Graziosi


Ogawa (Int Tax Public Financ 20(3):474–484, 2013) discusses the analysis of Kempf and Rota-Graziosi (J Public Econ 94(9–10):768–776, 2010a) by taking into account capital ownership in the government’s objective functions. He establishes that the unique subgame perfect Nash equilibrium (SPNE) of the endogenous timing game corresponds to the simultaneous Nash equilibrium. This result contrasts with Kempf and Rota-Graziosi (J Public Econ 94(9–10):768–776, 2010a) who conclude to the existence of two Stackelberg outcomes at the SPNEs. Highlighting the role of plain complementarity or substitutability, we obtain conditions under which leadership still emerges at the equilibrium of the endogenous timing game when capital ownership is considered. Numerical simulations confirm this finding and display a case where plain properties are not monotone and a well-identified Stackelberg outcome is the SPNE.


Endogenous timing Tax competition First/second-mover advantage Plain complements/substitutes Stackelberg 

JEL Classification

H30 H87 C72 



We thank for comments and suggestions participants to the IIPF 2013 conference, and especially our discussant, Zarko Kalamov.

Supplementary material

10797_2014_9339_MOESM1_ESM.nb (254 kb)
ESM 1 (nb 254 kb)


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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.Ecole Normale Supérieure de Cachan and Paris School of EconomicsParisFrance
  2. 2.CERDIUniversité d’AuvergneClermont-FerrandFrance
  3. 3.Fiscal Affairs DepartmentInternational Monetary FundWashingtonUSA

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