The effect of effective tax rate differentials and clustering on investment in Belgium
This paper looks at the effect of agglomeration economies on the tax sensitivity of investments in Belgian firms using detailed firm-level data. We find a negative effect of taxation on investment. However, this is dampened by the presence of agglomeration externalities. Our results hint to the importance of local labor market and supplying industries for firm investment decisions and follow the more nuanced view on tax competition of the New Economic Geography models.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +32 (0) 16 / 32 6661
Web page: http://www.econ.kuleuven.be/vives
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:ete:vivwps:28. 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: (Damiaan Persyn)
If references are entirely missing, you can add them using this form.