Theoretic Essays in Public Economics
Profit Shifting in General Oligopolistic Equilibrium and the Role of Information in Career Concern Models
von Ansgar Franziskus Quint
Datum der mündl. Prüfung:2024-01-10
Erschienen:2024-02-09
Betreuer:Prof. Dr. Robert Schwager
Gutachter:Prof. Dr. Robert Schwager
Gutachter:Prof. Dr. Udo Kreickemeier
Gutachter:Dr. Refik Emre Aytimur
Dateien
Name:Dissertation_Quint.pdf
Size:884.Kb
Format:PDF
Zusammenfassung
Englisch
This dissertation combines four theoretic models in public economics. The first two chapters consider welfare and distributional effects within a general equilibrium trade model with oligopoly focusing on corporate taxation and profit shifting. The second part analyses the efficiency of elections depending on communication between voters and regional structures affecting voters’ information. The first part of this dissertation investigates asymmetries between countries in a general oligopolistic equilibrium framework. The first chapter proposes a trade model with two countries, which allows oligopoly in segmented markets. When countries or their policies diverge, oligopolistic behaviour has macro-level effects on welfare and distribution. Through firms’ strategic behaviour, country asymmetries can lead to deviations from the law of one price, which affects the countries’ terms of trade and thus leads to shifts in consumption and welfare. This framework is utilised in the second chapter to analyse company taxation and tax-motivated transfer pricing. Tax rate differentials increase the income in the high-tax country leading to higher consumption. Profit shifting through transfer pricing partly reverses this income effect. This leads to an increase in welfare in the low-tax country. Transfer pricing also creates an additional incentive to export and expand production, which affects wages in such a way that real wages increase in both countries. In the second part, communication and regional structures are analysed within a career concern framework of elections. The third chapter shows that voters’ information becomes more precise if they communicate with others, even though it also leads to duplicated information within the electorate and thus more synchronous voting decisions. Better information of voters leads to more incentives for the incumbent to exert effort before the election, increasing the accountability property of the election. It also improves the electorate’s selection of the more competent politician. The fourth chapter incorporates regional structures in the career concern framework to discuss their effects on accountability. Other regions serve as yardsticks to better assess one’s own incumbent, thus improving accountability. If, however, the number of voters in a federation is fixed, there exists a trade-off between yardstick competition and smaller electorates. In a parliament of directly elected politicians, increasing the number of constituencies has a dual effect. With more parliamentarians, each has less influence individually leading to less effort. However, voters’ information becomes more precise which positively affects effort.
Keywords: accountability; communication; elections; general oligopolistic equilibrium; information; labour share; income distribution; international policy transmission; international trade; parliament; profit shifting; strategic trade; tax evasion; transfer pricing; yardstick competition