Firm Location in a Polycentric City: The Effects of Taxes and Agglomeration Economies on Location Decisions

Janet Kohlhase and Xiahong Ju
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Xiahong Ju: Houston – Galveston Area Council, 3555 Timmons Lane, Houston, TX 77227, USA

Environment and Planning C, 2007, vol. 25, issue 5, 671-691

Abstract: The authors explore the determinants of firm location in a polycentric city with the aid of data for the Houston region. Firm location is modeled in a discrete-choice framework, with eight employment centers and outlying areas used as possible choices. Agglomerative and dispersive forces are explicitly treated, as are taxes and other characteristics that vary over space. The findings suggest that property taxes have large deterrent effects on firm locations for the four industrial groups analyzed here: oil and gas; manufacturing; finance, insurance and real estate (FIRE); and services. When agglomeration economies are present, they are weaker than the tax effects and are positive for only the FIRE and services industrial groups.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envirc:v:25:y:2007:i:5:p:671-691

DOI: 10.1068/c0649

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