Optimal National policies towards multinationals when local regions can choose between firm-specific and non-firm-specific policies

• Tác giả: Osiris Jorge Parcero
• Ngôn ngữ: eng
• Ký hiệu phân loại: 338.88 Multinational business enterprises
• Thông tin xuất bản: 2024
• Bộ sưu tập: Báo, Tạp chí
• ID: 201198

Tóm tắt

Comment: Pages 26, 3 tables, 1 figureThis paper looks at a country's optimal central-government optimal policy in a setting where its two identical local jurisdictions compete to attract footloose multinationals to their sites, and where the considered multinationals strictly prefer this country to the rest of the world. For the sake of realism the model allows the local jurisdictions to choose between firm-specific and non-firm-specific policies. We show that the implementation of the jurisdictional firm-specific policy is weakly welfare dominant. Hence the frequent calls for the central government to ban the former type of policies go against the advice of this paper.