A generalized analysis of the effects of business taxes on the production location choice under uncertainty

This paper employs a unifying approach to examine the effects of various business taxes on a firm’s choice of plant location under uncertainty. A general n-input production function is adopted, and the firm located on an n-input planar space is assumed to face output price, input price, or production uncertainties. In addition to showing that most previous results can be extended to our general setting, we also provide some new propositions concerning the comparative statics of the firm’s location choices and the relative impact of various business taxes.