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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...

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Tax Policy, Location Choices, and Market Structure

Pfann, Gerard A.; van Kranenburg, Hans - 2002

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...

Persistent link: https://www.econbiz.de/10010274360