Economics at your fingertips  

Public input and business tax competition in local communities in Brazil

Ricardo Politi, Enlinson Mattos and Eric Picin ()
Additional contact information
Eric Picin: Fundação Getúlio Vargas

The Annals of Regional Science, 2021, vol. 67, issue 3, No 10, 799-824

Abstract: Abstract Previous works emphasize the role of tax rates as the key feature of tax competition. This paper brings into attention how local jurisdictions consider the level of public provision in infrastructure and the business tax rates as strategic complements to compete for capital. We use a spatial Durbin model to estimate the impact of a change in the public infrastructure of a particular jurisdiction on one’s own and on their neighbors’ business tax rates. Using data for approximately 5,000 municipalities in Brazil over a seven-year period, our main findings indicate that local governments reactions to tax rate reductions from neighboring jurisdictions are associated in three possible ways: also decreasing their effective tax rates, increasing their public infrastructure spending, or combining both strategies.

JEL-codes: H72 R12 R51 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
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:

Ordering information: This journal article can be ordered from

DOI: 10.1007/s00168-021-01067-w

Access Statistics for this article

The Annals of Regional Science is currently edited by Martin Andersson, E. Kim and Janet E. Kohlhase

More articles in The Annals of Regional Science from Springer, Western Regional Science Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

Page updated 2023-11-13
Handle: RePEc:spr:anresc:v:67:y:2021:i:3:d:10.1007_s00168-021-01067-w