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Industrial Agglomeration and Capital Taxation

Hans Jarle Kind (), K.H. Midelfart Knarvik and Guttorm Schjelderup ()
Authors registered in the RePEc Author Service: Karen Helene Ulltveit-Moe

Working Papers from Norwegian School of Economics and Business Administration-

Abstract: Models with imperfect competition and intra-industry trade have become widely accepted as appropriate frameworks within which to analyze the impact of trade liberalization on industrial agglomeration. This paper makes one modification to the standard model; it allows for taxation of internationally mobile capital. Making this change fundamentally alters the main lesson from the tax literature that a country which faces a perfectly elastic supply of capital should not use source-based taxes on capital income.

Keywords: TRADE LIBERALIZATION; TAXATION; CAPITAL (search for similar items in EconPapers)
JEL-codes: F21 F15 H25 (search for similar items in EconPapers)
Date: 1998
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