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Title:Agglomeration and Tax Competition PDF Logo
Authors:Borck, Rainald
Pflüger, Michael
Issue Date:2004
Series/Report no.:IZA Discussion paper series 1033
Abstract: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.
Subjects:economic geography
agglomeration
tax competition
JEL:H73
F22
F15
R12
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
Publikationen von Forscherinnen und Forschern des DIW

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