| This dissertation consists of three essays that analyze tax competition of commuters in the United States and foreign direct investment in China.; Chapter two presents a tax competition model in which local governments can use a wage tax or a land tax to finance public expenditure and compete for commuters. In this model the governments provide public capital goods which are considered a factor of production. It is argued in asymmetric competition, the wage tax rates depend on the parameters of production functions and except under rare circumstances, public capital good is inefficiently provided across the two jurisdictions.; Chapter three presents empirical evidence on the relation between sizes and wage tax rates of 308 localities in metropolitan areas of Ohio and Pennsylvania. The Two Stage Least Squares estimation results show that for both Ohio and Pennsylvania inter-jurisdictional worker flow has an important effect on the decision of local wage tax rates. On the other hand, effect of wage tax rates on worker flow is not significant for either state, but other factors including population, per capita income and per capita capital stock do have significant effects.; Chapter four presents empirical evidence about: the relation between taxes and the distribution of foreign direct investment in China. The estimation results show that taxes have a significantly negative effect on the location of FDI. It is also found that the cities that were opened up earlier have a head start compared with those opened up later in terms of accumulative FDI. |
