On the strategic choice between capital and labor mobility

Leonard K. Cheng*, Kar yiu Wong

*Corresponding author for this work

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

13 Citations (Scopus)

Abstract

This paper analyzes the strategies of two governments when choosing between capital and labor mobility. For each type of factor mobility, the Nash equilibria under both income taxes and quotas on factor flows are derived. From each country's point of view, an income tax dominates a quota. The paper also shows that in a strategic environment, Ramaswami's result that a country prefers the restricted inflow of a scarce factor to the restricted outflow of an abundant factor continues to hold for some initial factor endowments, but the opposite result may obtain for other factor endowments.

Original languageEnglish
Pages (from-to)291-314
Number of pages24
JournalJournal of International Economics
Volume28
Issue number3-4
DOIs
Publication statusPublished - 1 Jan 1990
Externally publishedYes

Fingerprint

Labour mobility
Factors
Strategic choice
Capital mobility
Income tax
Factor endowments
Factor mobility
Government
Nash equilibrium

Cite this

@article{ce2fb9bb9f1447f5a2b3936eb387a1aa,
title = "On the strategic choice between capital and labor mobility",
abstract = "This paper analyzes the strategies of two governments when choosing between capital and labor mobility. For each type of factor mobility, the Nash equilibria under both income taxes and quotas on factor flows are derived. From each country's point of view, an income tax dominates a quota. The paper also shows that in a strategic environment, Ramaswami's result that a country prefers the restricted inflow of a scarce factor to the restricted outflow of an abundant factor continues to hold for some initial factor endowments, but the opposite result may obtain for other factor endowments.",
author = "Cheng, {Leonard K.} and Wong, {Kar yiu}",
year = "1990",
month = "1",
day = "1",
doi = "10.1016/0022-1996(90)90005-7",
language = "English",
volume = "28",
pages = "291--314",
journal = "Journal of International Economics",
issn = "0022-1996",
publisher = "Elsevier",
number = "3-4",

}

On the strategic choice between capital and labor mobility. / Cheng, Leonard K.; Wong, Kar yiu.

In: Journal of International Economics, Vol. 28, No. 3-4, 01.01.1990, p. 291-314.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

TY - JOUR

T1 - On the strategic choice between capital and labor mobility

AU - Cheng, Leonard K.

AU - Wong, Kar yiu

PY - 1990/1/1

Y1 - 1990/1/1

N2 - This paper analyzes the strategies of two governments when choosing between capital and labor mobility. For each type of factor mobility, the Nash equilibria under both income taxes and quotas on factor flows are derived. From each country's point of view, an income tax dominates a quota. The paper also shows that in a strategic environment, Ramaswami's result that a country prefers the restricted inflow of a scarce factor to the restricted outflow of an abundant factor continues to hold for some initial factor endowments, but the opposite result may obtain for other factor endowments.

AB - This paper analyzes the strategies of two governments when choosing between capital and labor mobility. For each type of factor mobility, the Nash equilibria under both income taxes and quotas on factor flows are derived. From each country's point of view, an income tax dominates a quota. The paper also shows that in a strategic environment, Ramaswami's result that a country prefers the restricted inflow of a scarce factor to the restricted outflow of an abundant factor continues to hold for some initial factor endowments, but the opposite result may obtain for other factor endowments.

UR - http://www.scopus.com/inward/record.url?scp=38249016768&partnerID=8YFLogxK

U2 - 10.1016/0022-1996(90)90005-7

DO - 10.1016/0022-1996(90)90005-7

M3 - Journal Article (refereed)

VL - 28

SP - 291

EP - 314

JO - Journal of International Economics

JF - Journal of International Economics

SN - 0022-1996

IS - 3-4

ER -