This paper measures the relative importance of quality and quantity effects of corporate taxation on foreign direct investment. Quantity is affected if corporate taxes reduce the equilibrium stock of foreign capital in a given country. Quality effects arise if taxes decrease the extent to which...

Several recent papers show that increases in the capital stock at one multinational affiliate tend to raise the capital stock at other locations, rather than to reduce it. In this paper, we theoretically and empirically explore the consequences of these findings for national corporate tax...

Recent studies suggest that multinational firm activities at home and abroad are positively correlated which may be due to the use of common inputs (like marketing, patents, etc.). Then, a cost shock at one location may lead to reduced activity in all other locations within the firm. In this...

A model is presented of the tax competition and tax effects on enterprise decisions. The role of multinational enterprises and whether and to what extent they aggravate the tax competition between states is explored. Newer empiric analyses show that tax competition is on the increase and could...

This paper measures quantity and quality effects of corporate taxation on foreign direct investments (FDI). While corporate taxes are well known to reduce the equilibrium stock of foreign capital in a given country, they may also change the quality of investment projects. Our analysis focuses on...

In a recent study, Becker & Riedel (EER, 2012), we show that an increase in foreign taxes is associated with a decrease in domestic investment. In this paper, we explore the implications of this finding for tax competition. If foreign taxes decrease domestic investment instead of increasing it,...

We use a laboratory experiment to investigate the behavioral effects of obligations that are not backed by binding deterrent incentives. To implement such `expressive law' we introduce different levels of very weakly incentivized, symmetric and asymmetric minimum contribution levels...

This paper investigates whether the institution of life time tenure for public sector employees affects the selection of workers into private and public sector occupation. Precisely, we argue that more generous employment protection for public sector employees may induce risk averse individuals...

This paper investigates corporate taxation under separate accounting (SA) and formula apportionment (FA) in a model with union wage bargaining and multinational firms. Under SA, we find that increases in the corporate tax rate raise the wage level of domestic workers, while they lower the...

This paper presents a new approach to estimating the existence and magnitude of tax-motivated income shifting within multinational corporations. Existing studies of income shifting use changes in corporate tax rates as a source of identification. In contrast, this paper exploits exogenous...