Capital indivisibility and tax competition: Are there too many business areas when some of them are empty?

Hubert Jayet and Sonia Paty

Post-Print from HAL

Abstract: In this paper, we propose a model where local jurisdictions must engage a development cost before competing for hosting a firm with uncertain preferences among possible sites. We first show that even an optimizing central planner managing all the jurisdictions develops more sites than there are plants to host. Doing so, he diversifies his supply and has a higher probability of hosting the firm. Then, we show that, if every jurisdiction is managed by a local government, there are more developed sites than with the central planner, which implies excess supply.

Keywords: TAX COMPETITION; MARKET OF SITES; INFORMATIONAL ASYMETRY; BUSINESS AREAS; DECENTRALIZED EQUILIBRIUM; INVESTMENT INDIVISIBILITY; CENTRAL PLANNER (search for similar items in EconPapers)
Date: 2006-11
References: Add references at CitEc
Citations: View citations in EconPapers (13)

Published in Journal of Urban Economics, 2006, 60 (3), pp.399-417. ⟨10.1016/j.jue.2006.04.001⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Capital indivisibility and tax competition: Are there too many business areas when some of them are empty? (2006)
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:hal:journl:hal-02318750

DOI: 10.1016/j.jue.2006.04.001

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().