@techreport{Koh2010governments,
abstract = {Using the German local business tax as a testing ground, we empirically investigate the impact of firm agglomeration on municipal tax setting behavior. The analysis exploits a rich data source on the population of German firms to construct detailed measures for the communities' agglomeration characteristics. The findings indicate that urbanization and localization economies exert a positive impact on the jurisdictional tax rate choice which confirms predictions of the theoretical New Economic Geography (NEG) literature. Further analysis suggests a qualification of the NEG argument by showing that a municipality's potential to tax agglomeration rents depends on its firm and industry agglomeration relative to neighboring communities. To account for potential endogeneity problems, our analysis exploits long-lagged population and infrastructure variables as instruments for the agglomeration measures.},
address = {M\"{u}nchen},
author = {Hyun-Ju Koh and Nadine Riedel},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {H73; R12; 330; agglomeration rents; corporate taxation; regional differentiation; Gemeindesteuer; Gewerbesteuer; Steuertarif; Agglomerationseffekt; Regionale Konzentration; Lokalisationseffekt; Deutschland},
language = {eng},
number = {2976},
publisher = {CESifo},
title = {Do governments tax agglomeration rents?},
type = {CESifo working paper Public Finance},
url = {http://hdl.handle.net/10419/39028},
year = {2010}
}
