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Title:Agglomeration and tax competition PDF Logo
Authors:Pflüger, Michael
Borck, Rainald
Issue Date:2004
Series/Report no.:DIW-Diskussionspapiere 408
Abstract:Tax competition for a mobile factor is different in `new economic geography set- tings' 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 the 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.
Subjects:Economic Geography
Agglomeration
Tax Competition
JEL:H73
F22
F15
R12
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
DIW-Diskussionspapiere

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