open access

https://hdl.handle.net/2115/22541

Are Regional Asymmetries Detrimental to Tax Coordination in a Repeated Game Setting?

英語

Tax coordination

2007-06-18

Graduate School of Economics and Business Administration, Hokkaido University

Discussion Paper, Series A

183

1-14

This paper reexamines the main findings of Cardarelli et al. (2002), and Contenaro and Vidal (2006), who show that regional asymmetries undermine the implicit collusion of tax coordination in a repeated game model of capital tax competition. In particular, this paper investigates how increasing regional differences in the per capita capital endowments and/or production technologies affect the willingness of each region to cooperate in achieving tax coordination. It is shown not only that there may exist cases where tax coordination is facilitated with an increase in regional asymmetries increase and the greater the degree of asymmetry in terms of the net capital exports of the regions, but also that the higher the cooperation of the regions with respect to the sustenance of tax coordination.

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