Arbeitspapier

Agglomeration and Tax Competition

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.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 1033

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

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

Handle
Last update
10.03.2025, 11:45 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Borck, Rainald
  • Pflüger, Michael
  • Institute for the Study of Labor (IZA)

Time of origin

  • 2004

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