Becker, Johannes (2007) Corporate Taxation, Multinational Firms and Heterogeneity. PhD thesis, Universität zu Köln.
More than twenty years ago, public finance scholars started to focus on the phenomenon of international capital mobility and its consequences for public goods provision by national governments. The tax competition literature found considerable response in the political arena since it picked up some growing concern about the increasing limitations of the national state�s scope for action. Since then, the economy, tax policy and the scholarly thinking about these two have evolved. What was a newly perceived phenomenon back then in 1986, is long an omnipresent issue in the public debate. Meanwhile, public finance scholars have started to evaluate their theoretical predictions. In short, some of them turned out to be correct, others failed. The obvious mismatch of theories and empirical evidence in some cases triggered a second wave of tax competition papers, which sets out to reconcile international tax theory and the evidence. This book is part of this research program. In this book, I consider firm heterogeneity as a possible explanation for some puzzles. A large part of the tax competition literature is (implicitly) based on the concept of homogeneous firms, i.e. taxation affects firms identically, or differences in their exposure to taxation are not relevant for the model predictions. As I show in this book, the introduction of certain differences between firms requires considerable modifications of the standard theory and its predictions.
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