Agglomeration and Tax Competition
Rainald Borck () and
Michael P. Pflüger ()
Additional contact information
Michael P. Pflüger: University of Würzburg
No 1033, IZA Discussion Papers from Institute of Labor Economics (IZA)
Tax competition for a mobile factor is different in 'new economic geography settings' compared to standard tax competition models. The agglomeration rent which accrues to the mobile factor in the core region can be taxed. Moreover, a tax differential between the core and the periphery can be maintained. The present paper reexamines this issue in a setting which, in addition to core-periphery equilibria, exhibits stable equilibria with partial agglomeration. We show that a tax differential may arise as an equilibrium of the tax game even when there is only partial agglomeration and the mobile factor does not derive an agglomeration rent.
Keywords: economic geography; agglomeration; tax competition (search for similar items in EconPapers)
JEL-codes: F15 F22 H73 R12 (search for similar items in EconPapers)
Pages: 33 pages
New Economics Papers: this item is included in nep-dev, nep-geo, nep-pbe and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8) Track citations by RSS feed
Published in: European Economic Review, 2006, 50 (3), 647-668
Downloads: (external link)
Journal Article: Agglomeration and tax competition (2006)
Working Paper: Agglomeration and Tax Competition (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp1033
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().