Abstract
The paper analyzes the effects of differences in local economic conditions on the distribution of economic activity across cities. A new data base on a cross section of large American cities is used to examine the influence of local factors, fiscally related ones especially, on the factor intensity of manufacturing activity across cities. Property taxes are found to increase the labor intensity of a city's manufacturing base but payroll and corporate income taxes are not found to have any significant effect on the factor intensity of manufacturing activity across cities. High-wage cities are found to have relatively capital-intensive manufacturing bases.
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