Hauptmeier S, Mittermaier F, Rincke J (2012)
Publication Language: English
Publication Type: Journal article
Publication year: 2012
Publisher: Elsevier
Book Volume: 42
Pages Range: 407-419
Journal Issue: 3
DOI: 10.1016/j.regsciurbeco.2011.10.007
Governments are widely perceived as competing for capital by choosing parameters in a multi-dimensional policy space. We consider the choice of a business tax rate as well as a productive public input by local governments and estimate a model of strategic interaction in both policy instruments. The estimations suggest that local governments use both the business tax rate and public inputs to compete for capital. We find that if neighbors cut their tax rates, governments try to restore competitiveness by lowering their own tax and increasing public inputs. If neighbors provide more infrastructure, governments react by increasing their own spending.
APA:
Hauptmeier, S., Mittermaier, F., & Rincke, J. (2012). Fiscal competition over taxes and public inputs. Regional Science and Urban Economics, 42(3), 407-419. https://dx.doi.org/10.1016/j.regsciurbeco.2011.10.007
MLA:
Hauptmeier, Sebastian, Ferdinand Mittermaier, and Johannes Rincke. "Fiscal competition over taxes and public inputs." Regional Science and Urban Economics 42.3 (2012): 407-419.
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