Chao, Chi-Chur; Yu, Eden - In: The Journal of International Trade & Economic Development 7 (1998) 1, pp. 71-85
-investment tax credits are absent or present in the source country. In the absence of tax credits, the optimal policy is a pollution … tax with a foreign-investment tax or subsidy. The presence of tax credits may, however, result in a higher investment tax …-country's tax credits may cause a switch in the host-country's capital subsidy to a tax, which may improve the environment. …