Agglomeration, Tax Competition, and Fiscal Equalization
10 Pages Posted: 23 May 2008
Date Written: May 2008
Abstract
This paper analyzes the impact of fiscal equalization on asymmetric tax competition when positive agglomeration externalities are present. It shows that equalization of standardized tax revenue improves the spatial allocation of capital provided that agglomeration externalities are sufficiently strong.
Keywords: Agglomeration, tax competition, fiscal equalization
JEL Classification: R12, H71, H73
Suggested Citation: Suggested Citation
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