IDEAS home Printed from
   My bibliography  Save this article

Factor Ownership, Taxes, and Specialization


  • Sam Bucovetsky


This paper examines the incentives of regions to levy taxes, when the tax revenue is not needed to finance the regional public sector. It is assumed that capital is completely mobile among regions, but that labor is completely immobile. Since each region can produce the same two tradable goods, using the same technology, then differences in tax rates on capital will lead to some specialization. If residents of one region own more of the nation's capital (per person), then these tax differences may be an equilibrium phenomenon. Regions with below-average capital endowment per person will levy capital taxes to lower the cost of the capital they import, even though these taxes lead to capital flight, and specialization in the labor-intensive good.

Suggested Citation

  • Sam Bucovetsky, 1993. "Factor Ownership, Taxes, and Specialization," Canadian Journal of Economics, Canadian Economics Association, vol. 26(2), pages 317-336, May.
  • Handle: RePEc:cje:issued:v:26:y:1993:i:2:p:317-36

    Download full text from publisher

    File URL:
    Download Restriction: only available to JSTOR subscribers

    As the access to this document is restricted, you may want to search for a different version of it.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Braid, Ralph M., 2005. "Tax competition, tax exporting and higher-government choice of tax instruments for local governments," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1789-1821, September.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cje:issued:v:26:y:1993:i:2:p:317-36. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Prof. Werner Antweiler). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.