Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18379
Authors: 
Borck, Rainald
Caliendo, Marco
Steiner, Viktor
Year of Publication: 
2005
Series/Report no.: 
DIW Discussion Papers 528
Abstract: 
In this paper, we consider fiscal competition between jurisdictions. Capital taxes are used to finance a public input and two public goods, one which benefits mobile skilled workers and one which benefits immobile unskilled workers. We derive the jurisdictions? reaction functions for different spending categories. We then estimate these reaction functions using data from German communities. Thereby we explicitly allow for a spatially lagged dependent variable and a possible spatial error dependence by applying a generalized spatial tow-stage least squares (GS2SLS) procedure. The results show, that there is significant interaction between spending of neighbouring counties in Germany.
Subjects: 
Tax competition
capital skill complementarity
public spending
spatial econometrics
JEL: 
J61
J24
H77
Document Type: 
Working Paper

Files in This Item:
File
Size
251.65 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.