Firm Location in a Polycentric City: The Effects of Taxes and Agglomeration Economies on Location Decisions

The authors explore the determinants of firm location in a polycentric city with the aid of data for the Houston region. Firm location is modeled in a discrete-choice framework, with eight employment centers and outlying areas used as possible choices. Agglomerative and dispersive forces are explici...

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Bibliographic Details
Published in:Environment and planning. C, Government & policy Government & policy, 2007-10, Vol.25 (5), p.671-691
Main Authors: Kohlhase, Janet E, Ju, Xiahong
Format: Article
Language:English
Subjects:
Cities
Decision making
Enterprises
Environment
Innovation
Knowledge
Local communities
Public policy
Taxes
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Summary:The authors explore the determinants of firm location in a polycentric city with the aid of data for the Houston region. Firm location is modeled in a discrete-choice framework, with eight employment centers and outlying areas used as possible choices. Agglomerative and dispersive forces are explicitly treated, as are taxes and other characteristics that vary over space. The findings suggest that property taxes have large deterrent effects on firm locations for the four industrial groups analyzed here: oil and gas; manufacturing; finance, insurance and real estate (FIRE); and services. When agglomeration economies are present, they are weaker than the tax effects and are positive for only the FIRE and services industrial groups.
ISSN:0263-774X
1472-3425
DOI:10.1068/c0649