Double-edged incentive competition for foreign direct investment

作者：Ma Jie^*

来源：International Tax and Public Finance, 2017, 24(2): 282-312.

DOI：10.1007/s10797-016-9409-0

• Foreign direct investment (FDI)
• Incentive competition
• Special interest lobbying
• Common agency

This paper studies the impact of special interest lobbying on competition for foreign direct investment (FDI) in a common agency framework. We argue that special interest lobbying may provide an extra political incentive for governments to attract FDI. We show that compared with the benchmark case where governments maximize national welfare, now (1) an economically disadvantageous country has a chance to win FDI competition; (2) the equilibrium subsidy for attracting FDI is higher than in the benchmark case; (3) allocative efficiency cannot be always achieved.

• 出版日期2017-4
• 单位对外经济贸易大学