The aim of this paper is to analyse the impact of foreign investments on a small country's economy in a context of international competition. To that end, we model tax and infrastructure competition within a differential game framework between two unequal sized countries. The model accounts for...

In our paper we show that when countries compete in taxes and infrastructures, coordination through a uniform tax rate or a minimum rate does not necessarily create the welfare effects observed under pure tax competition. The divergence is even worse when the competing jurisdictions differ in...

We revisit the investment home-bias situation of firms and extend the home attachment setting of Mansoorian and Myers (1993) and Ogura (2006) into a dynamic framework. We locate firms based on their home attachment preferences, which is also changing over time based on some updated spillover...

In this paper, we analyze the long run economic performance of a small economy open to foreign investments. Policy instruments used to attract investments are taxes and attractive public infrastructures, whereas the policy choices of the rest of the world are taken as given. Applying the...

We study the impact of an offshore financial center on the economy in the presence or absence of bank secrecy in a two-country setting with heterogeneous investors who choose where to deposit their savings. Rather than focussing on tax competition, we acknowledge that countries use two...

This paper explains why and how a small country can be an offshore financial center (OFC). We build a model involving a small and a large country competing for portfolio investments. They use two instruments, taxation and institutional infrastructure. We identify the conditions for an OFC to be...

The aim of this paper is to analyze within a simple model how a re- moval of bank secrecy can impact tax revenues and banks' profitability assuming that offshore centers are able to offer sophisticated but legal or not easily detectable tax planning. Two alternative regimes are considered. A...

In this paper, we analyse competition among jurisdictions to attract firms through low taxes on capital and/or high level of public goods, which enhance firms' productivity. We assume that the competing jurisdictions are different in (population) size and that the mobility of capital is costly....

In this paper, we analyze the risk-taking behavior of banks in emerging economies in a context of international capital mobility. Our paper highlights a new channel through which depositors can exercise pressure to control risk taking. Depositors can reallocate their savings away from their home...

Our aim is to explain how a small country can be viable as an international banking center (IBC). We build a model in which mobile investors choose between two banking centers located respectively in a small country and in a large country. These countries compete in two instruments, taxation and...