Assessing the Effects of Local Taxation Using Microgeographic Data
43 Pages Posted: 20 Dec 2006
Date Written: September 2006
Abstract
We study the impact of local taxation on the location and growth of firms. Our empirical methodology pairs establishments across jurisdictional boundaries to estimate the impact of taxation. Our approach improves on existing work as it corrects for unobserved establishment heterogeneity, for unobserved time-varying site specific effects, and for the endogeneity of local taxation. Applied to data for English manufacturing establishments we find that local taxation has a negative impact on employment growth, but no effect on entry.
Keywords: Local taxation, spatial differencing, borders, regression discontinuity
JEL Classification: H22, H71, R38
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
Competing for Capital in a 'Lumpy' World
By Guttorm Schjelderup, Hans Jarle Kind, ...
-
Agglomeration and Tax Competition
By Rainald Borck and Michael Pflüger
-
A Simple, Analytically Solvable Chamberlinian Agglomeration Model
-
Firm Location Decisions, Regional Grants and Agglomeration Externalities
By Rachel Griffith, Michael P. Devereux, ...