Agglomeration Economies, Taxable Rents, And Government Capture: Evidence From A Place-Based Policy
Brülhart, Marius and
Helen Simpson
Authors registered in the RePEc Author Service: Marius Brülhart
No 10578, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Abstract:
We study how industry-level agglomeration economies affect government policy. Using administrative data on firm subsidies in economically lagging regions of Great Britain, we test two alternative hypotheses. Economic geography models imply that firms at an industry?s core can sustain higher tax burdens or require lower subsidies than firms in more remote locations. Conversely, political economy models predict firms at the industry?s core to be more successful at lobbying government, particularly at the sub-national level, thus obtaining more favourable fiscal treatment. We find that local government agencies structure subsidy offers to favour pre-existing employment in locally agglomerated industries, behaviour more in line with theories of policy capture than with economic geography models.
Keywords: Agglomeration; Policy capture; Regional grants; Taxation (search for similar items in EconPapers)
JEL-codes: H25 H32 R12 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-geo, nep-pol and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)
Downloads: (external link)
https://cepr.org/publications/DP10578 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org
Related works:
Journal Article: Agglomeration economies, taxable rents and government capture: evidence from a place-based policy (2018) 
Working Paper: Agglomeration economies, taxable rents, and government capture: evidence from a place-based policy (2014) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:10578
Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP10578
Access Statistics for this paper
More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().