TY - JOUR
T1 - Competencia fiscal con las firmas heterogÍneas
AU - Baldwin, Richard E.
AU - Okubo, Toshihiro
N1 - Publisher Copyright:
© 2014 Regional Studies Association.
PY - 2014/7/14
Y1 - 2014/7/14
N2 - This paper studies tax competition in an economic geography model that allows for agglomeration economies with trade costs and heterogeneous firms. We find that the Nash equilibrium involves a large country charging a higher tax than a small nation. Lower trade costs lead to an intensification of competition, a drop in Nash tax rates and a narrowing of the gap. Since large, productive firms are naturally more sensitive to tax differences in our model, large firms are the crux of tax competition in our model. This also means that tax competition has consequences for the average productivity of big and small nations’ industries; by lowering tax rates, a small nation can attract high-productivity firms.
AB - This paper studies tax competition in an economic geography model that allows for agglomeration economies with trade costs and heterogeneous firms. We find that the Nash equilibrium involves a large country charging a higher tax than a small nation. Lower trade costs lead to an intensification of competition, a drop in Nash tax rates and a narrowing of the gap. Since large, productive firms are naturally more sensitive to tax differences in our model, large firms are the crux of tax competition in our model. This also means that tax competition has consequences for the average productivity of big and small nations’ industries; by lowering tax rates, a small nation can attract high-productivity firms.
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U2 - 10.1080/17421772.2014.930164
DO - 10.1080/17421772.2014.930164
M3 - Article
AN - SCOPUS:84904079778
VL - 9
SP - 309
EP - 326
JO - Spatial Economic Analysis
JF - Spatial Economic Analysis
SN - 1742-1772
IS - 3
ER -