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. Labour is imperfectly mobile and governments impose redistributive taxes. Regional integration is modeled as either increased labour 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.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by EconWPA in its series International Trade with number
9801001.
Length: 38 pages Date of creation: 20 Jan 1998 Date of revision: Handle: RePEc:wpa:wuwpit:9801001
Note: Type of Document - MS Word; prepared on IBM PC ; to print on HP; pages: 38 ; figures: included. * Drafts of this paper have been presented at the European Science Foundation conference on Migration and Development, Mont Ste-Odile, May 1996; a Workshop on International Trade and Factor Movements between Distorted Economies held by the University of Konstanz, July 1996; the annual meeting of the American Economic Association, New Orleans, January 1997; the Midwest International Economics conference, May 1997; and workshops at EPRU, Copenhagen in July 1997 and the Tinbergen Institute, Rotterdam in November 1997. We are grateful to participants for their comments and suggestions. Contact details of provider: Web page: http://129.3.20.41
For technical questions regarding this item, or to correct its listing, contact: (EconWPA).
Find related papers by JEL classification: F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies F15 - International Economics - - Trade - - - Economic Integration F22 - International Economics - - International Factor Movements and International Business - - - International Migration H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.) This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.