This paper uses Nebraska sales tax data to estimate the magnitude of cross-border shopping in response to travel cost when a local sales tax changes. The results indicate that a one percent increase in a local sales tax induces cross-border shopping by 4.81 percent in a city that has an adjacent...

Using a natural experiment from Germany, we show that temporary place-based subsidies generate persistent effects on economic density. We identify employment and capital formation as main channels for higher income per square kilometer. As the spatial regression discontinuity design allows us to...

In an effort to improve diet and health outcomes, policymakers have increasingly turned to supply-side subsidies aimed at encouraging investment by supermarkets and other food retailers in low-income areas. This paper examines whether the U.S. federal government’s New Markets Tax Credit (NMTC)...

Growing spatial inequality has led policymakers to enact tax breaks to attract corporate investment and jobs to economically peripheral regions. We demonstrate the importance of multi-plant firms’ physical capital structure for the efficacy of place-based policies by studying a bonus...

We study how industry-level agglomeration economies affect government policy. Using administrative data on firm subsidies in economically lagging regions of Great Britain, we test two alternative hypotheses. Economic geography models imply that firms at an industry’s core can sustain higher...

Using a natural experiment from Germany, we show that temporary place-based subsidies generate persistent effects on economic density. We identify employment and capital formation as main channels for higher income per square kilometer. As the spatial regression discontinuity design allows us to...

This article provides theoretical and empirical evidence that local fiscal competition generates a bias toward low business tax rates. Furthermore, it is shown that this bias is stronger for smaller jurisdictions. First, a theoretical model is settled with private and public capital and a fixed...

This paper models theoretically and investigates empirically the consequences on local economic performance of state mandates on financially distressed authorities. In particular, I analyze the switch from systematic state bailout of regional health care deficits to selectively mandated hikes in...

This paper analyzes Enterprise Zones in Colorado in order to study the relationship between geographically targeted tax credits and the location of new businesses and jobs. Enterprise Zone (EZ) programs provide tax incentives for investment and job creation in economically lagging regions. While...

We examine the consequences of federal corporate tax enforcement for local business activity. U.S. corporate tax return audits have declined significantly in recent years, and recent policies target expanding the number of tax return audits to improve tax revenues. However, tax audits can impose...