Firms localisation and sorting depending on the different local tax schemes

Rémy Oddou 1
Abstract : This paper analyses the effect of local taxation and local public goods on the localization and the sorting of freely mobile firms. Firms use two production factors: capital and labour. A local public good can be used as a partial substitute for capital. We consider a production function la Cobb-Douglas, the parameters of which differ from one firm to another. Local public goods are financed through two different local corporate taxation schemes that are simultaneously considered: a tax based on the capital asset value and a tax on benefit. We find that firms will self-sort themselves with respect to a parameter that is close to the capital intensity. Among firms with the same returns to scale, the more capitalistic a firm is, the more willing it will be to set in a jurisdiction with a high tax rate and an important amount of public good.
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Article dans une revue
Economics Bulletin, Economics Bulletin, 2016, 35, pp.1782-1787
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https://hal.archives-ouvertes.fr/hal-01611389
Contributeur : Economix Parisnanterre <>
Soumis le : jeudi 5 octobre 2017 - 18:48:24
Dernière modification le : mardi 23 janvier 2018 - 12:58:03

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Rémy Oddou. Firms localisation and sorting depending on the different local tax schemes. Economics Bulletin, Economics Bulletin, 2016, 35, pp.1782-1787. 〈hal-01611389〉

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