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Capital allocation in an asymmetric tax competition model with agglomeration economies

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  • Taiki Susa

Abstract

In this study, we analyze asymmetric tax competition in the presence of capital agglomeration effects. As is well known from traditional studies of asymmetric tax competition, a pecuniary externality arises and distorts the efficiency of capital allocation between regions. We show that the difference-in-capital-endowment can improve the efficiency of capital allocation in the economy. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Taiki Susa, 2014. "Capital allocation in an asymmetric tax competition model with agglomeration economies," Letters in Spatial and Resource Sciences, Springer, vol. 7(3), pages 185-193, October.
    • Handle: RePEc:spr:lsprsc:v:7:y:2014:i:3:p:185-193
    DOI: 10.1007/s12076-013-0110-y
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    More about this item

    Keywords

    Tax competition; Agglomeration; Pecuniary externality; H71; H73; R51;
    All these keywords.

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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