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Tax Differentials in Intraregional Firm Location: Evidence from New Manufacturing Establishments in Spanish Municipalities

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  • Jordi Jofre-Monseny
  • Albert Sole-Olle

Abstract

Jofre-Monseny J. and Sole-Olle A. Tax differentials in intraregional firm location: evidence from new manufacturing establishments in Spanish municipalities, Regional Studies. This paper analyses empirically how differences in local taxes affect the intraregional location of new manufacturing plants. These effects are examined within the random profit maximization framework. It looks at the location decision of more than 10 000 manufacturing establishments locating between 1996 and 2003 across more than 400 municipalities in Catalonia, a Spanish region. It is found that local taxes on business and property deter new manufacturing establishments. It is necessary to restrict the choice set to the local labour market and, above all, to control for agglomeration economies to identify the effects of taxes on the location of new establishments. [image omitted] Jofre-Monseny J. et Sole-Olle A. Les ecarts dans les taux d'imposition et la localisation intra-regionale des entreprises: des preuves provenant des nouveaux etablissements industriels situes dans les municipalites espagnoles, Regional Studies. Cet article cherche a analyser de facon empirique comment les ecarts entre les taux d'imposition locaux influent sur la localisation intra-regionale des nouveaux etablissements industriels. On examine ces effets au sein d'un cadre au hasard de la maximisation des benefices. On etudie le choix de localisation de plus de 10.000 etablissements industriels entre 1996 et 2003 a travers plus de 400 municipalites en Catalogne, une region espagnole. Il s'avere que les impots locaux sur le commerce et la propriete dissuadent les nouveaux etablissements industriels. Il est necessaire de limiter l'ensemble des choix au marche du travail local et, surtout, de tenir compte des economies d'agglomeration afin d'identifier les effets des impots sur la localisation des nouveaux etablissements. Impots locaux Localisation des entreprises Economies d'agglomeration Regression de Poisson Jofre-Monseny J. und Sole-Olle A. Steuerdifferentiale bei den Standorten intraregionaler Firmen: Belege aus neuen Produktionsbetrieben in spanischen Gemeinden, Regional Studies. In diesem Beitrag wird empirisch analysiert, wie sich Unterschiede bei lokalen Steuern auf den intraregionalen Standort neuer Produktionsbetriebe auswirken. Diese Auswirkungen werden im Rahmen der zufalligen Gewinnmaximierung untersucht. Wir untersuchen die Standortentscheidungen von mehr als 10.000 Produktionsbetrieben, die sich im Zeitraum von 1996 bis 2003 in mehr als 400 Gemeinden der spanischen Region Katalonien angesiedelt haben. Wir stellen fest, dass lokale Steuern auf Unternehmen und Eigentum neue Produktionsbetriebe abschrecken. Es ist notwendig, die Auswahl fur den lokalen Arbeitsmarkt einzuengen; insbesondere jedoch muss auf Agglomerationswirtschaften kontrolliert werden, um die Auswirkungen der Steuern auf den Standort neuer Unternehmen zu identifizieren. Lokale Steuern Firmenstandort Agglomerationswirtschaften Poisson-Regression Jofre-Monseny J. y Sole-Olle A. Diferencias impositivas en la ubicacion de empresas intrarregionales: ejemplo de nuevos establecimientos de fabricacion en municipios espanoles, Regional Studies. En este articulo analizamos empiricamente de que modo las diferencias en los impuestos locales influyen en la ubicacion intrarregional de nuevas plantas de fabricacion. Examinamos estos efectos en un marco aleatorio de maximizacion de beneficios. Estudiamos las decisiones de ubicacion de mas de 10.000 establecimientos de fabricacion entre 1996 y 2003 en mas de 400 municipios en Cataluna. Observamos que los impuestos locales en negocios y propiedades disuaden a los nuevos establecimientos de fabricacion. Es necesario limitar las opciones al alcance del mercado laboral local, y sobre todo controlar las economias de aglomeracion a fin de identificar los efectos de los impuestos en la ubicacion de nuevos establecimientos. Impuestos locales Ubicacion de empresas Economias de aglomeracion Regresion de Poisson

Suggested Citation

  • Jordi Jofre-Monseny & Albert Sole-Olle, 2010. "Tax Differentials in Intraregional Firm Location: Evidence from New Manufacturing Establishments in Spanish Municipalities," Regional Studies, Taylor & Francis Journals, vol. 44(6), pages 663-677.
    • Handle: RePEc:taf:regstd:v:44:y:2010:i:6:p:663-677
    DOI: 10.1080/00343400802508877
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    References listed on IDEAS

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    1. Gilles Duranton & Laurent Gobillon & Henry G. Overman, 2011. "Assessing the Effects of Local Taxation using Microgeographic Data," Economic Journal, Royal Economic Society, vol. 121(555), pages 1017-1046, September.
    2. Richard Baldwin & Rikard Forslid & Philippe Martin & Gianmarco Ottaviano & Frederic Robert-Nicoud, 2005. "Economic Geography and Public Policy," Economics Books, Princeton University Press, edition 1, number 7524.
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    1. Yingcheng Li & Kai Zhu, 2017. "Spatial dependence and heterogeneity in the location processes of new high-tech firms in Nanjing, China," Papers in Regional Science, Wiley Blackwell, vol. 96(3), pages 519-535, August.
    2. Rongjun Long & Wei Lang & Xun Li, 2020. "Does Institutional Embeddedness Promote Regional Enterprises’ Migration? An Empirical Analysis Based on the “Double Transfer” Strategy in Guangdong, China," Sustainability, MDPI, vol. 12(7), pages 1-21, April.
    3. Mercedes Rubio-Andrés & Mª Ramos-González & Miguel Ángel Sastre-Castillo, 2022. "Driving innovation management to create shared value and sustainable growth," Review of Managerial Science, Springer, vol. 16(7), pages 2181-2211, October.
    4. Marius Brülhart & Kurt Schmidheiny, 2015. "Estimating The Rivalness Of State-Level Inward Fdi," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 139-148, January.
    5. Albert Sol魏ll頍 & Pilar Sorribas-Navarro, 2012. "The dynamic adjustment of local government budgets: does Spain behave differently?," Applied Economics, Taylor & Francis Journals, vol. 44(25), pages 3203-3213, September.
    6. Niklas Elert, 2014. "What determines entry? Evidence from Sweden," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 55-92, August.
    7. Ludo Peeters & Coro Chasco, 2016. "Identifying local determinants of destination choices of international immigrants to the Madrid metropolitan area," Papers in Regional Science, Wiley Blackwell, vol. 95(2), pages 281-307, June.
    8. Chandra R. Bhat & Rajesh Paleti & Palvinder Singh, 2014. "A Spatial Multivariate Count Model For Firm Location Decisions," Journal of Regional Science, Wiley Blackwell, vol. 54(3), pages 462-502, June.
    9. Albert Solé-Ollé & Pilar Sorribas-Navarro, 2012. "The dynamic adjustment of local government budgets: does Spain behave differently?," Applied Economics, Taylor & Francis Journals, vol. 44(25), pages 3203-3213, September.
    10. Marius Brülhart & Kurt Schmidheiny, 2015. "Estimating The Rivalness Of State-Level Inward Fdi," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 139-148, January.
    11. Jofre-Monseny, Jordi & Solé-Ollé, Albert, 2012. "Which communities should be afraid of mobility? The effects of agglomeration economies on the sensitivity of employment location to local taxes," Regional Science and Urban Economics, Elsevier, vol. 42(1-2), pages 257-268.
    12. Philippe Van Cauwenberge & Peter Beyne & Heidi Vander Bauwhede, 2016. "An empirical investigation of the influence of municipal fiscal policy on firm growth," Environment and Planning C, , vol. 34(8), pages 1825-1842, December.

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