TY  - JOUR
AU  - Baldwin,Richard
AU  - Okubo,Toshihiro
TI  - Tax reform, delocation and heterogeneous firms
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15109
PY  - 2009
Y2  - June 2009
UR  - http://www.nber.org/papers/w15109
L1  - http://www.nber.org/papers/w15109.pdf
N1  - Author contact info:
Richard Baldwin
Cigale 2
1010 Lausanne
SWITZERLAND
Tel: 41-22-908-5900
E-Mail: rbaldwin@cepr.org

Toshihiro Okubo
RIEB Kobe University
2-1, Rokkodai cho, Nada-ku, Kobe,
657-8501 JAPAN
E-Mail: okubo@rieb.kobe-u.ac.jp
AB  - The standard international tax model is extended to allow for heterogeneous firms when agglomeration forces are important thus allowing us to study the relocation effects of taxes that vary according to firm size. We show that allowing for heterogeneity permits a given tax scheme to have an endogenously different effect on the location decision of small and big firms, with the biggest firms being endogenously more likely to relocate in reaction to high taxes. We show that a reform which flattens the tax-firm-size profile can raise tax revenue without inducing any relocation.
ER  -