This paper analyzes competition for capital between welfare-maximizing governments in a framework with agglomeration tendencies and asymmetric unionization. We find that a unionized country's government finds it optimal to use tax policy to induce industry to relocate towards a location with a...

Over the past decade, several countries augmented their national tax law by transfer pricing legislations in order to limit opportunities for tax-motivated transfer price distortions and the associated relocation of multnational income from their borders. The aim of this paper is to empirically...

Existing evidence shows that R&D tax incentives boost countries' private sector R&D. As multinational enterprises (MNEs) account for nearly all private sector innovations, it is unclear, however, whether firms engage in genuinely new R&D or whether R&D is reallocated across borders. Drawing on...