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Tax haven, pollution haven or both?

Author

Listed:
  • Thierry Madiès
  • Ornella Tarola
  • Emmanuelle Taugourdeau

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique)

Abstract
This paper studies the interplay between two groups of countries, large and small, which compete sequentially on corporate taxes and environmental regulations to attract imperfectly mobile firms. We show that in general, the small countries undercut the large countries in terms of corporate taxes. The small countries choose to be both tax and pollution havens when they are less concerned about the environment than the large countries are and capital integration is low. The large countries never act as both tax havens and pollution havens. Finally, we find that higher firm mobility narrows the tax gap between the large and the small countries but does not affect the optimal environmental policy: tax competition immunizes countries against the detrimental effect of globalization on emission caps.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Thierry Madiès & Ornella Tarola & Emmanuelle Taugourdeau, 2022. "Tax haven, pollution haven or both?," Post-Print hal-03772706, HAL.
    • Handle: RePEc:hal:journl:hal-03772706
    DOI: 10.1007/s10797-022-09745-x
    Note: View the original document on HAL open archive server: https://hal.science/hal-03772706
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    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • R5 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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