MannheimTaxation: Does infrastructure compensate for higher taxes? Experimental evidence from a large-scale manager survey
MannheimTaxation: Does infrastructure compensate for higher taxes? Experimental evidence from a large-scale manager survey
Period:
01.01. – 31.12.2022
Firm location and investment decisions are crucial for the economic prosperity of local communities. To that effect, local governments have a variety of policy tools at their disposal through which they can influence firms’ decisions in their location choices and investment decisions. Economic theory suggests, among others, that firms optimize in their investment decisions over location-specific tax costs, which reduce net profits, as well as over location-specific productive amenities, which increase productivity and expected profits. This project exploits a randomized information experiment among a representative survey of German firm managers to learn how firms perceive and invest under this optimization trade-off.