Agglomeration and Tax Competition

Arbeitspapier

Tax competition for a mobile factor is different in 'new economic geography settings' compared to standard tax competition models. The agglomeration rent which accrues to the mobile factor in the core region can be taxed. Moreover, a tax differential between the core and the periphery can be maintained. The present paper reexamines this issue in a setting which, in addition to core-periphery equilibria, exhibits stable equilibria with partial agglomeration. We show that a tax differential may arise as an equilibrium of the tax game even when there is only partial agglomeration and the mobile factor does not derive an agglomeration rent.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 1033

Classification and Topics

• Classification: Wirtschaft ; State and Local Government; Intergovernmental Relations: Interjurisdictional Differentials and Their Effects ; International Migration ; Economic Integration ; Size and Spatial Distributions of Regional Economic Activity
• Subject: economic geography ; agglomeration ; tax competition ; Steuerwettbewerb ; Kern-Peripherie-Beziehung ; Agglomerationseffekt ; Neue ökonomische Geographie ; Spieltheorie ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Borck, Rainald ; Pflüger, Michael
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/20268
• Last update: 10.03.2025, 11:45 AM CET