, network, coordination, and agglomeration economies. As has been shown, especially in small economies and less developed …

We show that agglomeration forces can reverse standard international-tax-competition results. Closer integration may … agglomeration forces create quasi-rents that can be taxed without inducing delocation. This suggests that the tax game is something … 'periphery' countries. Since agglomeration rents are a bell-shaped function of the level of integration, the equilibrium tax gap …