According to the existing literature, capital taxes should not be imposed in the presence of optimal profit taxation in either unionised or competitive labour markets. We show that this conclusion does not hold for an economy with dual labour markets, where the competitive wage rate provides the outside option for unionised workers. Even with non-distortionary profit taxation it is optimal for ...

This paper shows that firms from financial centres are more likely to go public than their provincial counterparts. The financial centre bias is analysed for 32 countries, including the European Union, the USA and Japan. It is particularly strong in countries with underdeveloped stock markets and closed corporate governance regimes, but it is still present in countries with the most developed s...