Intra-regional Tax Competition and Economic Geography
<heading id="h1" level="1" format="display" implicit="no">Abstract</heading> In this paper, we extend a solvable version of the core-periphery agglomeration model to four countries located in two regions to show that governments in the agglomerated region may not be able to levy a tax premium on mobile capital if there is intra-regional tax competition. This hypothesis challenges standard results in the literature and delegates clarification to empirical research. With respect to welfare, we find that intra-regional tax competition is detrimental from a welfare perspective and that tax harmonisation unambiguously makes both countries in the core region better off. Copyright 2010 Blackwell Publishing Ltd.
Year of publication: |
2010
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Authors: | Hühnerbein, Ossip ; Seidel, Tobias |
Published in: |
The World Economy. - Wiley Blackwell. - Vol. 33.2010, 8, p. 1042-1051
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Publisher: |
Wiley Blackwell |
Saved in:
freely available
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