A Simple Model of Commodity Taxation and Cross-Border Shopping

By S. Nielsen. 2001

141 citations recorded by the source corpus.

This paper sets up a simple model in which two countries, differing in geographical extent, engage in commodity tax competition originating in opportunities for cross-border shopping. The non-cooperative tax equilibrium and various coordination initiatives are examined in the benchmark model and in two model extensions incorporating (i) costs of transportation for goods and (ii) border inspection. Among the more surprising results are the following: with (i), pure profits accrue to sellers near the border, but subjecting them to tax may lower the country's total tax revenue; with (ii), the volume of cross-border shopping may well increase. Copyright 2001 by The editors of the Scandinavian Journal of Economics.

Subfields: Accounting, Economics and Econometrics, Political Science and International Relations

View Paper: https://www.semanticscholar.org/paper/a45f3ac14243a89798c59ce7bbe1fee536ed01ff

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Ben Lockwood
2. Robin Boadway
3. Masayoshi Hayashi

In Economics and Econometrics

1. Ben Lockwood
2. Barry R. Weingast
3. Robin Boadway
4. W. Oates
5. Masayoshi Hayashi

In Political Science and International Relations

1. Ben Lockwood
2. Barry R. Weingast
3. Robin Boadway
4. W. Oates
5. Masayoshi Hayashi

Citations in the corpus

• International Tax Competition and Coordination (2014, unknown): “50 Nielsen, Raimondos-Møller and Schjelderup (2003) show, however, that formula apportionment may not eliminate transfer pricing incentives when subsidiaries of a controlling parent compete in oligopolistic markets.”
• Tax competition and tax co-ordination under destination and origin principles: a synthesis (2001, background): “These papers characterize Nash equilibrium in origin-based taxes in a class of models where consumers can cross-border shop at a cost, and include Crombrugghe and Tulkens(1990), Kanbur and Keen(1993), Trandel(1994), Hau‡er(1996), (1998), and Nielsen(1998).”