International Tax and Public Finance

, Volume 12, Issue 5, pp 667–687 | Cite as

Has Tax Competition Emerged in OECD Countries? Evidence from Panel Data

  • Hannes WinnerEmail author


The theory of international tax competition suggests a shift of tax burden from mobile to immobile tax bases, especially for small open economies. This paper assesses these hypotheses empirically using a sample of 23 OECD countries and the time period 1965–2000. In accordance with tax competition theory, we find that capital mobility exerts a negative impact on capital tax burden, and a positive one on labor tax burden. Further, we observe a positive effect of country size, suggesting that small open economies are levying lower capital and labor taxes than larger ones. Finally, we analyze the time pattern of tax competition and demonstrate that tax competition has intensified since the mid 1980’s.


tax competition capital mobility panel data econometrics 


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Copyright information

© Springer Science + Business Media, Inc. 2005

Authors and Affiliations

  1. 1.Department of Economics and StatisticsUniversity of InnsbruckInnsbruckAustria

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