Profit tax and tariff under international oligopoly

Parai, Amar K.

doi:10.1016/s1059-0560(99)00021-0

Cited by 10 publications

(8 citation statements)

References 11 publications

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“…1 By contrast, Lee (1998), Ueng and Wu (2009), Goerke and Runkel (2006), and Wu (2016) show that the neutrality will not hold under tax evasion. In addition, studies also suggest that the neutrality of profit taxation will not hold under international oligopoly (Parai, 1999) or in a dynamic oligopoly model (Baldini & Lambertini, 2011).…”

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confidence: 99%

On the Neutrality of Profit Taxation in a Mixed Oligopoly

Kuo

Peng

Ueng

2021

J Public Economic Theory

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This paper investigates the neutrality of profit taxation in a mixed oligopoly where one (partially) public firm competes with private firms. We find that the neutrality of a profit tax is robust under a general cost and a general demand function as long as the degree of privatization is endogenously determined. This result is also true when product heterogeneity is considered under both Cournot and Bertrand competition. By contrast, if the degree of privatization is exogenously given, the profit tax neutrality holds only in the cases where the public firm is fully privatized or fully state‐owned; otherwise, the neutrality breaks down.

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confidence: 99%

On the Neutrality of Profit Taxation in a Mixed Oligopoly

Kuo

Peng

Ueng

2021

J Public Economic Theory

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“…However, when there is FDI, profit tax neutrality will no longer hold, whether it is in an oligopolistic market or in a mixed oligopolistic market, even if the privatization policy and import tariff policy are endogenous. It is worth mentioning that, unlike Parai (1999), this paper ignores the fact that foreign firms can choose to enter the domestic market either by exporting or by FDI in two different ways. However, the focus of Parai (1999) is not on the neutrality of the domestic profit tax system, but rather on how the domestic profit tax system affects the mode of entry chosen by foreigners.…”

Section: Discussionmentioning

confidence: 99%

“…It is worth mentioning that, unlike Parai (1999), this paper ignores the fact that foreign firms can choose to enter the domestic market either by exporting or by FDI in two different ways. However, the focus of Parai (1999) is not on the neutrality of the domestic profit tax system, but rather on how the domestic profit tax system affects the mode of entry chosen by foreigners. As such, this paper serves as a supplement to that study.…”

Section: Discussionmentioning

confidence: 99%

On the Neutrality of Profit Taxation under International Competition

Kuo,

Ueng,

Lin

et al. 2024

Preprint

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This paper investigates the neutrality of profit taxation under international competition. When the foreign entry mode is export, profit tax neutrality always holds under an oligopolistic market. However, profit tax neutrality only holds if the privatization policy is optimized under a mixed oligopolistic market. Furthermore, profit tax neutrality is irrelevant to whether the import tariff policy is endogenized. However, profit tax neutrality will not hold if there is FDI, even when the privatization policy and the import tariff policy are optimized. JEL classification: H21, L11, L22, L23

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“…Parai (1999) develops a model of international duopoly to examine the effects of both a tariff and a corporate profit tax. He finds that the latter could lower domestic output and employment.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

The Unemployment Puzzle of Corporate Taxation

Feldmann

2011

Public Finance Review

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Using annual data on nineteen industrial countries for the period 1979–2005 and a large number of controls, this article is the first to empirically study the impact of corporate taxes on the unemployment rate. In contrast to previous empirical research on the labor demand, investment and growth effects of corporate taxation, which consistently finds adverse effects, the regression results suggest that higher corporate taxes may have a favorable impact, lowering the unemployment rate. The magnitude of the estimated effect is substantial. The results of this study are robust to both endogeneity and numerous variations in specification.

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Profit tax and tariff under international oligopoly

Cited by 10 publications

References 11 publications

On the Neutrality of Profit Taxation in a Mixed Oligopoly

On the Neutrality of Profit Taxation in a Mixed Oligopoly

On the Neutrality of Profit Taxation under International Competition

The Unemployment Puzzle of Corporate Taxation

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