How do multinational enterprises (MNEs) affect the host country's economy through their vertical industrial linkages when large natural disasters occur? To answer this question, we develop a simple theoretical framework and show the possibility of multiple equilibria: one where the host country...

A salient feature of the current globalization is a loss of manufacturing in developed countries and rapid industrialization in middle-sized developing countries. This paper aims to construct a simple three-country trade and geography model with different market sizes and endogenous wage rates....

The Global Minimum Tax (GMT) is applied only to firms above a certain size threshold, permitting countries to set differential tax rates for small and large firms. We analyse tax competition between a tax haven and a non-haven country for heterogeneous multinationals to evaluate the effects of...

Do low corporate taxes always favor multinational production in the course of economic integration? We build a two-country spatial model with different corporate tax rates in which multinational enterprises (MNEs) can manipulate transfer prices in intra-firm trade. Using transfer pricing, MNEs...

This paper studies international tax competition for an oligopolistic industry with many firms. Each national government sets its tax rate strategically to maximize the weighted sum of residents' welfare and political contributions by owners of firms as special interest groups. It is shown that,...

Do low corporate taxes always favor multinational production in the course of economic integration? We build a two-country spatial model with different corporate tax rates in which multinational enterprises (MNEs) can manipulate transfer prices in intra-firm trade. Using transfer pricing, MNEs...