Taxes and location decisions of firms.

In traditional tax literature it is argued that (further) integration among countrieswill inevitably lead to a race to the bottom of corporate tax rates. In order toattract firms, countries are assumed to lower their tax rates below the ones of their’competitors’. According to the New Economic Geography literature this howeverdoes not necessarily need to be the case. It is argued that more agglomerated regionsbenefit from what is called agglomeration rents and that these rents can be taxed.As integration moves on, one might expect the tax difference between more and lessagglomerated regions to increase instead of fading out. The purpose of this paper isto test this theory for Belgian firms.

Partial compensation/responsibility

The goal of this paper is to analyse the impact of interactions between tax rates and agglomeration rents on location decisions of firms within Belgium. In the theoretical literature it is argued that both location determinants may weaken each other’s impact. Using the number of new firms at the sector level for 43 Belgian districts, we show that local effective tax rates either have no or a negative impact on location decisions. Moreover, both types of agglomeration rents in a district are important for location decisions. The presence of firms in a district attracts new firms, while the presence of firms in the same sector deters firm entry due to competition. However, the interaction effect between taxes and agglomeration rents on firm entry is significant. We show that a higher effective tax rate in a district weakens the positive impact of the agglomeration rents on location decisions of firms.

Explaining the spatial variation in housing prices: an economic geography approach.

Housing prices vary geographically, even between municipalities. Local differences can be attributed to differences in incomes, demographic effects and real estate characteristics. This paper argues that one should additionally take into account the geographical location of municipalities. In particular, housing prices are affected by distance and travel-time to important economic centers offering jobs and extensive services. Following the economic geography literature, we develop a model showing the impact of geographical barriers on housing prices. We estimate this model on municipality-level housing prices for all 589 Belgian municipalities in 2001. We also differentiate between the two main regions of Belgium (Flanders and Wallonia) as both regions are characterized by political, economic and geographical differences. We distinguish between the attractive forces exercised by both the capital city Brussels and other regional clusters. Our empirical results confirm the expectations. Geographical barriers have significantly negative effects on housing prices. Nevertheless we find important differences between the regions and the means of transport considered.Prices;

Explaining the Variation in housing princes: an economic geography approach

Housing prices vary geographically, even between municipalities. Local differences can be attributed to differences in incomes, demographic effects and real estate characteristics. This paper argues that one should additionally take into account the geographical location of municipalities. In particular, housing prices are affected by distance and travel-time to important economic centers offering jobs and extensive services. Following the economic geography literature, we develop a model showing the impact of geographical barriers on housing prices. We estimate this model on municipality-level housing prices for all 589 Belgian municipalities in 2001. We also differentiate between the two main regions of Belgium (Flanders and Wallonia) as both regions are characterized by political, economic and geographical differences. We distinguish between the attractive forces exercised by both the capital city Brussels and other regional clusters. Our empirical results confirm the expectations. Geographical barriers have significantly negative effects on housing prices. Nevertheless we find important differences between the regions and the means of transport considered.

More than 'mutual information': educational and sectoral gender segregation and their interaction on the Flemish labour market

We build on the Information Theory foundations of the Mutual Information Index of Segregation [Mora and Ruiz-Castillo, 2003; Frankel and Volij, 2007] to analyze two horizontal dimensions of gender segregation on the labour market. We provide a novel, three-way additive decomposition of their effects on overall segregation. Using survey data from 41,712 Flemish employees, we .find that choice of study field has a larger effect on overall segregation than sectoral choice. Their mutual interaction is negative, indicating that sectoral segregation, although low, is still partly explained by educational choices.

Heterogeneous firms and the micro origins of aggregate fluctuations. National Bank of Belgium Working Paper No. 312

This paper evaluates the impact of idiosyncratic productivity shocks to individual firms on aggregate output. Two sources of firm-level heterogeneity contribute to aggregate fluctuations: (i) asymmetries in supplier-buyer relationships and (ii) the skewed distribution of sales to final demand. We first develop a model with monopolistic competitive firms and derive a generalized centrality measure that takes these two sources of heterogeneity into account. The model is subsequently estimated using unique data on firm-to-firm transactions across all economic activities in Belgium. The model generates aggregate volatility from micro origins in the same order of magnitude as observed volatility in GDP. The top 100 firms contribute to 90% of the volatility generated by the model, underlining a strong granularity of the economy. Counterfactual analysis further shows that both sources of micro heterogeneity contribute substantially to aggregate fluctuations, while the relative contribution of each channel crucially depends on the labor share in the economy

Explaining the Location of Economic Activity. Is there a Spatial Employment Structure in Belgium?

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Real Estate Markets and the Location of Economic Activity

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Explaining the Location of Economic Activity. Is there a Spatial Employment Structure in Belgium?

This paper focuses on the importance of market access for firms’ location decisions. I estimate a structural parameters equation, a spatial wage and a spatial employment equation for Belgium, in line with the work of Hanson (1998, 2005) for the US, Mion (2004) for Italy, Garcia Pires (2006) and Paluzie et al (2009) for Spain and Brakman, Garretsen and Schramm (2002, 2004) and Roos (2001) for Germany. The findings suggest that linkages between firms and consumers are important for location decisions, as predicted by the New Economic Geography developed by (Krugman (1991)). However, conducting an Analysis of Variance on the estimation results, I conclude that firm-consumer linkages remain complementary with respect to other location theories. The last contribution of the paper is the estimation of spatial employment equations at regional and sectoral level. Firm-consumer linkages appear more important for the Northern than for the Southern part of Belgium while they turn out to be equally important for the service and manufacturing sector.status: publishe

The location of economic activity: first versus second nature core-periphery theories

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