Document Type


Publication Date

Spring 4-1-2012


The term “competitiveness” is a highly elastic concept that has been used in a myriad of different ways. However, in discussions of the connection between international taxation and competitiveness, there are two conceptions of competitiveness that are frequently used, but are not always clearly distinguished from one another. One conception emphasizes the competition between firms to be profitable and grow by acquiring productive assets. The other conception focuses on the competition between states to attract investment capital and people by varying their regulations.

Those two conceptions of competitiveness each imply a distinct definition of a domestic industry and a different mechanism whereby taxation affects competitiveness. Those two views also track popular positions in long standing policy debates. For example, each view is associated with a different tax neutrality benchmark. The first view is closely associated with capital export neutrality, whereas the second view is closely associated with capital ownership neutrality. Those two views also track opposing positions in the “Who Is Us?” debate from the 1990s.


International Taxation, investment, international competitiveness, tax competition, foreign direct investment, asset acquisition, international finance, tax incentives, cross-border transactions, foreign tax credits, capital export neutrality, capital import neutrality, capital ownership neutrality

Publication Title

Tax Law Review

Publication Citation

65 Tax L. Rev. 349 (2012).