Agglomeration, Tax Competition, and Fiscal Equalization

10 Pages Posted: 23 May 2008

See all articles by Matthias Wrede

Matthias Wrede

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Institute of Economics; CESifo (Center for Economic Studies and Ifo Institute)

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

Wrede, Matthias, Agglomeration, Tax Competition, and Fiscal Equalization (May 2008). Available at SSRN: https://ssrn.com/abstract=1134445 or http://dx.doi.org/10.2139/ssrn.1134445

Matthias Wrede (Contact Author)

University of Erlangen-Nuremberg-Friedrich Alexander Universität Erlangen Nürnberg - Institute of Economics ( email )

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