Interstate Business Tax Differentials and New Firm Location: Evidence from Panel Data
AbstractThis paper examines the impact of state and local tax differentials on the location of industry using a panel data set of manufacturing firm startups. The number of firm births is modeled as a Poisson count process and the estimation technique explicitly accounts for unobserved location or state heterogeneity in the estimation. A second focus of the analysis is the development of an industry and year specific series of effective tax rates for each state. After controlling for state and industry effects, the estimates indicate that a high state marginal effective tax rate reduces the number of firm births for most industries examined.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3184.
Date of creation: Nov 1989
Date of revision:
Publication status: published as Journal of Public Economics, Vol. 45, No. 1, pp. 47-68, (June 1991).
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Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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Other versions of this item:
- Papke, Leslie E., 1991. "Interstate business tax differentials and new firm location : Evidence from panel data," Journal of Public Economics, Elsevier, Elsevier, vol. 45(1), pages 47-68, June.
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- King, Mervyn A. & Fullerton, Don, 2010. "The Taxation of Income from Capital," National Bureau of Economic Research Books, University of Chicago Press, edition 0, number 9780226436319, 01-2013.
- Carlton, Dennis W, 1983. "The Location and Employment Choices of New Firms: An Econometric Model with Discrete and Continuous Endogenous Variables," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 440-49, August.
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