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Firm Location in a Polycentric City: The Effects of Taxes and Agglomeration Economies on Location Decisions

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  • Janet E Kohlhase

    (Department of Economics, University of Houston, Houston, TX 77204-5019, USA)

  • Xiahong Ju

    (Houston – Galveston Area Council, 3555 Timmons Lane, Houston, TX 77227, USA)

Abstract

The authors explore the determinants of firm location in a polycentric city with the aid of data for the Houston region. Firm location is modeled in a discrete-choice framework, with eight employment centers and outlying areas used as possible choices. Agglomerative and dispersive forces are explicitly treated, as are taxes and other characteristics that vary over space. The findings suggest that property taxes have large deterrent effects on firm locations for the four industrial groups analyzed here: oil and gas; manufacturing; finance, insurance and real estate (FIRE); and services. When agglomeration economies are present, they are weaker than the tax effects and are positive for only the FIRE and services industrial groups.

Suggested Citation

  • Janet E Kohlhase & Xiahong Ju, 2007. "Firm Location in a Polycentric City: The Effects of Taxes and Agglomeration Economies on Location Decisions," Environment and Planning C, , vol. 25(5), pages 671-691, October.
    • Handle: RePEc:sae:envirc:v:25:y:2007:i:5:p:671-691
    DOI: 10.1068/c0649
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    References listed on IDEAS

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    Cited by:

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    2. Katarzyna Kopczewska & Mateusz Kopyt & Piotr Ćwiakowski, 2021. "Spatial Interactions in Business and Housing Location Models," Land, MDPI, vol. 10(12), pages 1-25, December.
    3. Feldman, Maryann & Lowe, Nichola, 2015. "Triangulating regional economies: Realizing the promise of digital data," Research Policy, Elsevier, vol. 44(9), pages 1785-1793.
    4. Yong Liu & Wenze Yue & Peilei Fan, 2011. "Spatial Determinants of Urban Land Conversion in Large Chinese Cities: A Case of Hangzhou," Environment and Planning B, , vol. 38(4), pages 706-725, August.
    5. Yong Liu & Peilei Fan & Wenze Yue & Jingnan Huang & Dong Li & Zongshun Tian, 2019. "Assessing Polycentric Urban Development in Mountainous Cities: The Case of Chongqing Metropolitan Area, China," Sustainability, MDPI, vol. 11(10), pages 1-15, May.
    6. Wenze Yue & Yong Liu & Peilei Fan, 2010. "Polycentric Urban Development: The Case of Hangzhou," Environment and Planning A, , vol. 42(3), pages 563-577, March.
    7. Steven G. Craig & Janet E. Kohlhase & Adam W. Perdue, 2016. "Empirical Polycentricity: The Complex Relationship Between Employment Centers," Journal of Regional Science, Wiley Blackwell, vol. 56(1), pages 25-52, January.
    8. Timothy F. Leslie, 2010. "Identification and Differentiation of Urban Centers in Phoenix Through a Multi-Criteria Kernel-Density Approach," International Regional Science Review, , vol. 33(2), pages 205-235, April.
    9. Yue, Wenze & Wang, Tianyu & Liu, Yong & Zhang, Qun & Ye, Xinyue, 2019. "Mismatch of morphological and functional polycentricity in Chinese cities: An evidence from land development and functional linkage," Land Use Policy, Elsevier, vol. 88(C).
    10. Peter Nijkamp & Roger Stough & Maria Teresa de Noronha Vaz, 2007. "Local Knowledge and Innovation Policy," Environment and Planning C, , vol. 25(5), pages 633-637, October.
    11. Raimund Krumm & Harald Strotmann, 2013. "The impact of regional location factors on job creation, job destruction and employment growth in manufacturing," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 33(1), pages 23-48, February.
    12. Raimund Krumm & Harald Strotmann, 2010. "The Impact of Regional Supply and Demand Conditions on Job Creation and Destruction," IAW Discussion Papers 61, Institut für Angewandte Wirtschaftsforschung (IAW).
    13. Avin, Uri & Rodriguez, David A., 2010. "Discussion of "The Role of Employment Subcenters in Residential Location Decisions"," The Journal of Transport and Land Use, Center for Transportation Studies, University of Minnesota, vol. 3(1), pages 1-5.
    14. Yi Niu & Chengri Ding & Gerrit-Jan Knaap, 2015. "Employment Centers and Agglomeration Economies," Economic Development Quarterly, , vol. 29(1), pages 14-22, February.

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