Intervention (Hidden)
Subjects conduct the experiment via an online platform. All wordings presented below are translations of the original German question wording. Subjects will be randomly assigned to one of four experimental groups, and each subject takes decisions within the same survey using unique web-links which they receive for participation.
ALL SUBJECTS
The survey module has the following structure.
Stage 1: opener statement, headquarters location and spending efficacy
The survey opens with a neutral opener statement about the inter-jurisdictional competition for firms at the local level in Germany. The opener statement is shown to all experimental groups alike and reads as follows:
“The following questions deal with the municipal location competition for companies. On the one hand, German municipalities have to fulfill public tasks (such as the provision of transport infrastructure). On the other hand, German municipalities must also finance themselves for the provision of these services (for example, through municipal taxes on corporate profits).”
[Question wording:]
Respondents then state their home municipality by answering the question:
“In which municipality is the main location of your company?”
[Answer categories:]
Open field (subjects can type a name & find their locality in a pre-defined list); afterwards, the municipal name is dynamically shown as “YOUR MUNICIPALITY”; those who do not answer this question do not participate in the experiment.
Before answering the prior beliefs relevant for the treatment information in Stage 2, we ask subjects about the perceived efficacy of local spending in their municipality.
[Question wording:]
“What do you think: The municipality at your company's main location regularly uses tax revenues appropriately for meaningful purposes.”
[11 answer categories:]
Not true at all (0) Completely true (10)
Stage 2: prior beliefs on the local business tax rate (level & relative position)
Stage 2 starts with a neutral opening statement which familiarizes subjects with the concept of local business tax rates. The opener reads as follows:
“The local business tax is levied on the business income of a company. Differences in the amount of business tax between municipalities are determined by the local business tax rate, which is set by the municipalities themselves, respectively.”
[Question wording:]
„ What do you think: What is the local business tax rate in <<YOUR MUNICIPALITY>>?”
[answer categories:]
Slider in the range from 200 (legal minimum tax rate) to 2000
[Question wording:]
“What do you think: In what percentage of municipalities in Germany the local business tax rate is lower than in <<YOUR MUNICIPALITY>>:”
[answer categories:]
Slider in the range from 0 to 100 %
Stage 3: prior beliefs on the local access to infrastructure (level & relative position)
Stage 2 starts with a neutral opening statement which familiarizes subjects with the role of local transport infrastructure access for firms. The opener reads as follows:
“Fast access to transport infrastructure (e.g. to highways) represents an important contribution to ensuring and promoting business activity.”
[Question wording:]
“What do you think: How many minutes does it take on average to reach the nearest highway in <<YOUR MUNICIPALITY>>?“
[answer categories:]
Open text field
[Question wording:]
“What do you think: In what percentage of municipalities in Germany the nearest highway can be reached faster than in <<YOUR MUNICIPALITY>>?”
[answer categories:]
Slider in the range from 0 to 100%
Stage 4: randomized information provision
EXPERIMENTAL GROUP 1: CONTROL GROUP
No information provided
EXPERIMENTAL GROUP 2: Treatment 1
“You answered that xx% of the municipalities in Germany have a lower local business tax rate than <<YOUR MUNICIPALITY>>. In fact, according to official statistics, it is yy%. Compared to all municipalities: (SLIDER WITH ELICITED VS TRUE NUMBERS)”
EXPERIMENTAL GROUP 3: Treatment 2
“You answered that in xx% of the municipalities in Germany the highway is faster to reach on average than in <<YOUR MUNICIPALITY>>. In fact, according to official statistics, it is zz%. Compared to all municipalities: (SLIDER WITH ELICITED VS TRUE NUMBERS)”
EXPERIMENTAL GROUP 4: Treatment 3
“You answered that xx% of the municipalities in Germany have a lower local business tax rate than <<YOUR MUNICIPALITY>>. In fact, according to official statistics, it is yy%. Compared to all municipalities: (SLIDER WITH ELICITED VS TRUE NUMBERS)”
“You answered that in xx% of the municipalities in Germany the highway is faster to reach on average than in <<YOUR MUNICIPALITY>>. In fact, according to official statistics, it is zz%. Compared to all municipalities: (SLIDER WITH ELICITED VS TRUE NUMBERS)“
Stage 5: measuring outcomes
ALL SUBJECTS
Outcome 1: Location attractiveness of “YOUR MUNICIPALITY”
[Question wording:]
“How would you rate the location attractiveness in <<YOUR MUNICIPALITY>> from the point of view of your company?”
[11 answer categories:]
Very bad (0) Very good (10)
Outcome 2: Stated investment plans of the firm by location
[Question wording:]
“How likely do you think it is (in percent) that you will support future investments (e.g., in R&D, tangible assets, operating sites, and/or additional employees) in one of the following locations?” [elicitation for “In <<YOUR MUNICIPALITY>>”, “In neighboring municipalities of “YOUR MUNICIPALITY”, “In other German municipalities”; “Outside of Germany”, respectively]
[answer categories:]
Slider in the range from 0 to 100% + Category “Not specified”
Outcome 3: Perception of appropriate local business tax rate
[Question wording:]
“What do you think: What local business tax rate in <<YOUR MUNICIPALITY>> would be appropriate from your company's point of view?”
[answer categories:]
Slider in the range from 0 to 1000 percentage points + Category “I cannot judge”
Outcome 4: Attitude towards regional economic development funds
[Question wording:]
“What do you think: Should <<YOUR MUNICIPALITY>> benefit more from regional economic development funds (state, federal, EU)?”
[11 answer categories:]
Not at all (0) Very strongly (10)
Outcome 5: Trading-off business taxes with infrastructure in YOUR MUNICIPALITY
[Question wording:]
“Imagine that, starting from the status quo, <<YOUR MUNICIPALITY>> has budgetary leeway that allows either to reduce the local business tax rate or to improve the transport infrastructure. Which do you think should be rather done?”
[11 answer categories:]
Improve transport infrastructure (0) Reduce local business tax rate (10)
Outcome 6: Information acquisition
[Question wording:]
“We asked you earlier about an estimate for both the local business tax rate as well as the travel time to the nearest highway in <<YOUR MUNICIPALITY>>. We now offer you to receive this information from us. Please choose which information about <<YOUR MUNICIPALITY>> you would like to receive from us. Multiple answers are possible.”
[5 answer categories:]
“The local business tax rate”; “The travel time to the nearest highway”; “The share of German municipalities with a lower local business tax rate”; “The share of municipalities with a shorter travel time to the nearest highway”; “No information”