Kind, H.J.; Knarvik, K.H.M.; Schjelderup, G. - Norges Handelshøyskole (NHH) - 1999
internationally mobile capital. Each government may levy a source tax on capital and a lump sum tax on fixed labor. If industry is … concentrated in one of the countries, the analysis finds that the host country will gain from setting its source tax on capital … tax on capital and capture the positive externality that arise in the agglomeration. If industry is not concentrated …