Quotation Commendatore, Pasquale, Kubin, Ingrid. 2016. Source versus residence: A comparison from a new economicgeography perspective. Papers in Regional Science. 95 (2), 201-222.




A standard result on international capital income taxation is that applying the residence principle does not affect industrial location and is therefore more efficient than applying the source principle. However, many countries do in fact apply the source principle. We argue that in a new economic geography framework the standard result needs to be qualified: the size of the market is crucial for industry location and it is changed by taxation and by public expenditures; we show that - for the high tax region - this effect dampens capital losses under the source principle and causes them under the residence principle. The sharp difference between the two taxation principles blurs and, unsurprisingly, both principles are found in taxation laws.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Papers in Regional Science. The Journal of the Regional Science Association International
Citation Index SSCI
WU-Journal-Rating new VW-D
Language English
Title Source versus residence: A comparison from a new economicgeography perspective
Volume 95
Number 2
Year 2016
Page from 201
Page to 222
Reviewed? Y
DOI https://doi.org/10.1111/pirs.12134
Open Access N
JEL JEL H2, R1, R12, F12


Kubin, Ingrid (Details)
Commendatore, Pasquale (Università di Napoli ‘Federico II’, Italy)
Research Institute for International Taxation FI (Details)
Department of Economics (Kubin) (Details)
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