|
|
|
IZA
|
|
|
Tax Policy, Location Choices, and Market Structure
by
Gerard A. Pfann, Hans van Kranenburg
(May 2002)
published in: Journal of Law and Economics, 2003, 46 (1), 61-84
Abstract:
A structural model of entry and fiscal policy is presented. It shows that taxation of variable
production costs can increase product prices, lower competition, and reduce the availability
of new products in small markets. The model’s test is based on a unique nationwide fiscal
experiment. We study the effects of the 1869 stamped paper tax reform act on the market for
daily newspapers in the Netherlands. The econometric analysis uses data on when and
where the newspapers existed and were introduced together with demographic census data
from 1859 and 1869. The results confirm the model’s predictions and show how taxation
affects strategic business location decisions.
Text: See Discussion Paper No. 499
|
|
|
|
|
|