Garcia-Milà, TeresaMcGuire, Therese J.Universitat Pompeu Fabra. Departament d'Economia i Empresa2017-07-262017-07-262001-10-01Brooking-Wharton Papers on Urban Affairs, 2002, pp. 95-132http://hdl.handle.net/10230/554It is difficult to justify tax incentives within the existing economics literature on tax competition. We develop a model in which communities are interested in attracting firms not only for their own capital but also for the concentration externalities, a form of agglomeration economies, their location bestows on existing firms. We find that it is efficient in this case for communities to offer tax incentives, defined as a tax rate below the benefit tax level, to firms. We present the recent relocation of the Boeing Corporation's headquarters from Seattle to Chicago as a case study.application/pdfengL'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commonsinfo:eu-repo/semantics/workingPapertax incentivesconcentration externalitiesagglomeration economiestax competitionbenefit taxMacroeconomics and International Economicsinfo:eu-repo/semantics/openAccess