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MULTINATIONALS, TAX HOLIDAYS, AND TECHNOLOGY TRANSFER

2009; Springer Science+Business Media; Volume: 60; Issue: 1 Linguagem: Inglês

10.1111/j.1468-5876.2008.00475.x

1468-5876

Kaz Miyagiwa, Yuka Ohno,

Taxation and Compliance Studies

The Japanese Economic ReviewVolume 60, Issue 1 p. 82-96 MULTINATIONALS, TAX HOLIDAYS, AND TECHNOLOGY TRANSFER* KAZ MIYAGIWA, KAZ MIYAGIWA Osaka University and Emory UniversitySearch for more papers by this authorYUKA OHNO, YUKA OHNO PricewaterhouseCoopers LLPSearch for more papers by this author KAZ MIYAGIWA, KAZ MIYAGIWA Osaka University and Emory UniversitySearch for more papers by this authorYUKA OHNO, YUKA OHNO PricewaterhouseCoopers LLPSearch for more papers by this author First published: 19 February 2009 https://doi.org/10.1111/j.1468-5876.2008.00475.xCitations: 5 * This paper was presented at the 2008 Japanese Economic Association Conference, Katholieke Universiteit Leuren Ritsumeikan and Waseda Universities. We thank seminar participants and an anonymous referee of this Journal for their helpful comments and suggestions. Errors are our own responsibility. Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onEmailFacebookTwitterLinkedInRedditWechat Abstract Host country governments often grant investment incentives to foreign firms located in their territories. We show that such preferential treatment of foreign firms can induce transfer of foreign technology, facilitate entry by the local firm, and improve host country welfare. However, this pro-competitive outcome results when preferential treatment is granted for a limited time. Permanent tax concessions yield the opposite effect. REFERENCES Besley, T. and Suzumura, K. (1992) "Taxation and Welfare in an Oligopoly with Strategic Commitment", International Economic Review, Vol. 33, No. 2, pp. 413–432. Bond, E. W. and Samuelson, L. (1986) "Tax Holidays as Signals", American Economic Review, Vol. 76, No. 4, pp. 820–826. Brander, J. A. and Spencer, B. J. (1985) "Export Subsidies and Market Share Rivalry", Journal of International Economics, Vol. 18, No. 1–Vol. 2, pp. 83–100. Chaudhuri, T. D. and Adhikari, S. (1993) "Free Trade Zones with Harris-Todaro Unemployment: a Note on Young-Miyagiwa", Journal of Development Economics, Vol. 41, No. 1, pp. 157–162. Dixit, A. (1979) "A Model of Duopoly Suggesting a Theory of Entry Barriers", Bell Journal of Economics, Vol. 10 (4), pp. 20–32. Dixit, A. (1980) "The Role of Investment in Entry Deterrence", Economic Journal, Vol. 90, No. 357, pp. 95–106. Doyle, C. and Van Wijnbergen, W. (1994) "Taxation of Foreign Multinationals: a Sequential Bargaining Approach to Tax Holidays", International Tax and Public Finance, Vol. 1, No. 3, pp. 211–225. Facchini, G. and Willmann, G. (1999) "The Gains from Duty Free Zones", Journal of International Economics, Vol. 49, No. 2, pp. 403–412. Fudenberg, D. and Tirole, J. (1984) "The Fat-Cat Effect, the Puppy-Dog Ploy, and the Lean and Hungry Look", American Economic Review, Vol. 74, No. 2, pp. 361–366. Gelman, J. R. and Salop, S. (1983) "Judo Economics: Capacity Limitation and Coupon Competition", Bell Journal of Economics, Vol. 14, No. 2, pp. 315–325. Gupta, M. R. (2000) "Duty Free Zones and Unemployment in a Fair Wage Model", Keio Economic Studies, Vol. 37, No. 1, pp. 33–47. Hamada, K. (1974) "An Economic Analysis of the Duty-Free Zones", Journal of International Economics, Vol. 4, No. 3, pp. 225–241. Maskus, K. E. (2000) Intellectual Property Rights in the Global Economy. Washington DC: Institute for International Economics Press. McAfee, R. P. and Schwartz, M. (1994) Opportunism in Multilateral Vertical Contracting: Nondiscrimination, Exclusivity, and Uniformity", American Economic Review, Vol. 84, No. 1, pp. 210–230. Miyagiwa, K. (1986) "A Reconsideration of the Welfare Economics of Free Trade Zones", Journal of International Economics, Vol. 21, Nos. 3–4, pp. 337–350. Miyagiwa, K. (1993) "The Locational Choice for Free-Trade Zones: Rural versus Urban Options", Journal of Development Economics, Vol. 40, No. 1, pp. 187–201. Miyagiwa, K. and Ohno, Y. (1995) "Closing the Technology Gap under Protection", American Economic Review, Vol. 85, No. 4, pp. 755–770. Taylor, S. (1993) "TRIPS, Trade, and Technology Transfer", Canadian Journal of Economics, Vol. 26, No. 3, pp. 625–637. Young, L. (1987) "Intermediate Goods and the Formation of Duty-Free Zones", Journal of Development Economics, Vol. 25, No. 2, pp. 397–405. Young, L. and Miyagiwa, K. (1987) "Unemployment and the Formation of Duty-Free Zones", Journal of Development Economics, Vol. 26, No. 2, pp. 369–384. Citing Literature Volume60, Issue1March 2009Pages 82-96 ReferencesRelatedInformation