Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/123716
Authors: 
Blesse, Sebastian
Martin, Thorsten
Year of Publication: 
2015
Series/Report no.: 
ZEW Discussion Papers 15-081
Abstract: 
This paper exploits detailed information on local political and socioeconomic networks and a reform of local fiscal equalization in North Rhine-Westphalia (NRW) to identify the role of learning in local tax rate interactions. Using this policy change in spatial lag IV regressions, we find that institutions like counties and jointly used administrations yield significant positive tax interactions whereas geographical neighbors do not react to each other. Common local media trigger tax policy interactions as well. Short-lived reform effects support our findings that social learning within certain networks intensifies tax rate interactions via coordination of local decision makers.
Subjects: 
Tax mimicking
Local business tax
Social learning
Institutions
Tax competition
Fiscal equalization schemes
JEL: 
H20
H71
H77
Document Type: 
Working Paper

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