Do agglomeration economies reduce the sensitivity of firm location to tax differentials?

• 成果类型: Article
• 署名作者: Bruelhart, Marius; Jametti, Mario; Schmidheiny, Kurt
• 署名单位: University of Lausanne; Universita della Svizzera Italiana; University of Basel
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/j.1468-0297.2012.02511.x
• 发表日期: 2012
• 页码: 1069-1093
• 关键词: FOREIGN DIRECT-INVESTMENT; COMPETITION; EMPLOYMENT; FDI; decisions

摘要

Recent theoretical work in economic geography has shown that agglomeration forces can mitigate race-to-the-bottom tax competition, by partly or fully offsetting firms sensitivity to tax differentials. We test this proposition using data on firm births across Swiss municipalities. We find that corporate taxes deter firm births less in more spatially concentrated sectors. Firms in sectors with an agglomeration intensity in the top quintile are less than half as responsive to differences in corporate tax burdens as firms in sectors with an agglomeration intensity in the bottom quintile. Hence, agglomeration economies do appear to attenuate the impact of tax differentials on firms location choices.