TY  - RPRT
        AU  - Blesse, Sebastian
AU  - Buhlmann, Florian
AU  - Heil, Philipp
AU  - Rostam-Afschar, Davud
        TI  - Local Policy Misperceptions and Investment: Experimental Evidence from Firm Decision Makers
        PY  - 2025/Apr/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 17868
        UR  - https://www.iza.org/index.php/publications/dp17868
        AB  - We study firm responses to local policies through a survey experiment, providing randomized information on the competitiveness of business tax rates and highway access in their headquarters’ municipality. Firms often misperceive local policy competitiveness, especially for tax rates. Investment decisions respond asymmetrically to tax competitiveness. Positive tax rank information reduces investment intentions in neighboring municipalities. Compared to this, negative tax news increase relocation plans. However, most firms receiving bad news plan to continue investing in their headquarters’ municipality, indicating home bias. These effects are strongest for mobile firms and corporations. Negative infrastructure news lower location satisfaction but do not influence investment.
        KW  - survey experiment
KW  - firm location
KW  - infrastructure
KW  - tax competition
        ER  -