Country size and tax policy for international joint ventures in an integrated market
نویسنده
چکیده
Article history: Received 5 December 2011 Received in revised form 31 August 2012 Accepted 4 September 2012 Available online 11 September 2012 We investigate international joint ventures in an integrated market using a two-country model with asymmetric sizes. We show that although the domestic firm in the small country is less efficient, it is possible that the government of the small country imposes a higher tax than that of the large country. Moreover, we show that even if the domestic firm in the large country is less efficient, a joint venture by this firm and the foreign firm could be more productive, and the foreign firm could prefer to form a joint venture partnership with the domestic firm in the large country. © 2012 Elsevier Inc. All rights reserved. JEL classification: F23 H25 L24
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