Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/18915 
Year of Publication: 
2004
Series/Report no.: 
CESifo Working Paper No. 1277
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Our paper extends the capital tax competition literature by incorporating heterogeneous capital and agglomeration. Our model nests the standard tax competition model as well as the special case in which there is agglomeration but no firm/capital heterogeneity and the opposite case, firm heterogeneity with no agglomeration. We build on the existing tax competition literature as well as establish a link between this literature and the more recent work on agglomeration using the new economic geography model. Our main contribution lies in allowing for firm heterogeneity which we show plays a role similar to decreasing returns in regional production.
Subjects: 
tax competition
heterogeneous firms
agglomeration
JEL: 
H70
H32
R38
Document Type: 
Working Paper
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