This paper analyzes the impact of foreign investments on a small country's economy in the context of international competition. To that end, we model tax and public input competition within a di¤erential game framework between two unequally sized countries. The model accounts for the widely recognized characteristic that small states are more ‡exible in their political decision making than larger countries. However, we also acknowledge that small size is associated with limited institutional capacity in the provision of public services. The model shows that the long-term outcome of international competition crucially depends on the degree of capital mobility. In particular, we show that ‡exibility mitigates against -but does not eliminate -the likelihood of collapse in a small economy. Finally, we note that the bene…cial e¤ect of ‡exibility in a small state increases with its ine¢ ciency in providing public services and with the degree of international openness.

Durotaxis, a phenomenon that cells move according to changes in stiffness of the extra cellular matrix, has emerged as a crucial parameter controlling cell migration behavior. The current study provides a simple method to generate three-dimensional continuous stiffness variations without changing other physical characteristics of the extra cellular environment. Using Finite Element simulations, the stiffness and the stiffness gradient variations are evaluated quantitatively, leading to an analysis of the dependence of cell migration behavior on the substrate stiffness parameters. We tested various cell lines on several 3-D environments. The durotaxis results show that the cell migration velocity does not have any consistency with the stiffness of the substrate, rather it is more related to the stiffness gradient of the substrate. This finding suggests a new mechanism underlying the durotaxis phenomenon, highlighting the importance of the substrate stiffness gradient, rather than the stiffness itself.

In our paper, we demonstrate that when countries compete in taxes and infrastructure, coordination through a uniform tax rate or a minimum rate does not necessarily create the welfare effects observed under pure tax competition. The divergence is even worse when the competing jurisdictions differ in institutional quality. If tax revenues are used to gauge the desirability of coordination, our model demonstrates that imposing a uniform tax rate is Pareto-inferior to the non-cooperative equilibrium when countries compete in taxes and infrastructure. This result is completely reversed under pure tax competition if the countries are sufficiently similar in size. If a minimum tax rate is set within the range of those resulting from the non-cooperative equilibrium, the low tax country will never be better off. Finally, the paper demonstrates that the potential social welfare gains from tax harmonization crucially depend on the degree of heterogeneity among the competing countries.

In our paper, we demonstrate that when countries compete in taxes and infrastructure, coordination through a uniform tax rate or a minimum rate does not necessarily create the welfare effects observed under pure tax competition. The divergence is even worse when the competing jurisdictions differ in institutional quality. If tax revenues are used to gauge the desirability of coordination, our model demonstrates that imposing a uniform tax rate is Pareto-inferior to the non-cooperative equilibrium when countries compete in taxes and infrastructure. This result is completely reversed under pure tax competition if the countries are sufficiently similar in size. If a minimum tax rate is set within the range of those resulting from the non-cooperative equilibrium, the low tax country will never be better off. Finally, the paper demonstrates that the potential social welfare gains from tax harmonization crucially depend on the degree of heterogeneity among the competing countries.

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