The Silk Road: Tax Competition among Nation States

Abstract

Many commodities, before reaching their final destinations, are transshipped through several nations, each having independent authorities to tax commodities in transit. However, we show that such gmiddleh nations may be unable to exercise monopoly power over commodities in transit and all the rents are captured by the country where the commodities are produced and the country where there are markets.international tax competition, international trade, economic geography, repeated game