Capital allocation in an asymmetric tax competition model with agglomeration economies

Taiki Susa ()

Letters in Spatial and Resource Sciences, 2014, vol. 7, issue 3, 185-193

Abstract: In this study, we analyze asymmetric tax competition in the presence of capital agglomeration effects. As is well known from traditional studies of asymmetric tax competition, a pecuniary externality arises and distorts the efficiency of capital allocation between regions. We show that the difference-in-capital-endowment can improve the efficiency of capital allocation in the economy. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Tax competition; Agglomeration; Pecuniary externality; H71; H73; R51 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/s12076-013-0110-y

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