Economic geography and the fiscal effects of regional integration
Economic geography and the fiscal effects of regional integration
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DOI:
10.1016/s0022-1996(99)00050-1
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发表时间:
2000-12
影响因子:
3.3
通讯作者:
Rodney D. Ludema;I. Wooton
中科院分区:
文献类型:
--
作者:
Rodney D. Ludema;I. Wooton
In models of economic geography, plant-level scale economies and trade costs create incentives for spatial agglomeration of production into a manufacturing core and agricultural periphery, creating regional income differentials. We examine tax competition between national governments to influence the location of manufacturing activity. Labor is imperfectly mobile and governments impose redistributive taxes. Regional integration is modeled as either increased labor mobility or lower trade costs. We show that either type of integration may result in a decrease in the intensity of tax competition, and thus higher equilibrium taxes. Moreover, economic integration must increase taxes when the forces of agglomeration are the strongest.