Local Fiscal Strategy to Retain Heterogeneous Firms
研究了地方政府如何通过差异化税收和公共品组合来留住不同类型的企业，并分析了信息不对称下企业流动带来的租金分配和预算风险。
This paper is about the strategy of retaining unobservably heterogeneous firms attracted by unobservably valued outside alternatives. We prove that differentiating taxation and public good fiscal packages within one’s own locale dominates offering the same packages to all firms. We rationalize the full range of observed practice by considering more than one type of firm, more than one type of fiscal instrument, and all kinds of utility in alternative locations, under asymmetric information. Mobile agents can earn rents under some conditions, and immobile agents earn rents under others. Ways to minimize budgetary exposure in tax wars and effects on the composition of local economies are discussed.