This paper reviews the recent literature on the relocation of headquarters (HQs). Overall results show that full and direct international relocations of corporate HQs are rare events. However, there is a trend that MNEs increasingly unbundle their HQs so as to spread their different HQs...

The report surveys the incentive effects of taxes on capital and entrepreneurial income in light of the research in the field. The cash flow tax, the ACE tax and the tax on distributed profits of mature firms are known to be neutral with respect to the investment decisions. It is not widely...

We study how Foreign Direct Investment (FDI) measures gross fixed capital formation in foreign-owned companies. Our data include firm-level information on FDI inflows and real investment (Gross Fixed Capital Formation) by foreign-owned companies located in Finland. Our results suggest that the...

The widening range of countries acting as home and host to MNEs, and the continuing growth in all forms of cross-border economic activity, have prompted a large literature on the effects of outward MNE activity on the host countries. A smaller body of work has examined the effects on the home...

We consider a reform that would replace the current Finnish unemployment insurance (UI) scheme with individual unemployment accounts. The reform would provide additional pensions for individuals who end up with a positive account balance at retirement age without restricting unemployment...

Unemployment insurance and job protection regulations provide assistance to those who face unemployment. Unemployment insurance seems more desirable, since it does not harm flexibility in the labour markets, but it entails a moral hazard risk. Making the unemployment insurance voluntary and...

Subsidies to business sector R&D can be given either as R&D tax credits or direct grants. Majority of the OECD countries use both policy tools, Finland has used only grants. The Finnish support system has been functioning relatively well, but it has been argued that it does not support well...

It is popular to promote private R&D investments with tax credits or tax allowances in the OECD countries. This report depicts the justifications and criteria presented in economic literature, which should be used when decisions about tax incentives are made. The main argument is that firms do...

We compare different tax incentive schemes for private R&D investments using a numerical model of R&D-investments and firm dynamics. We find that tax incentives that are based on the incremental annual spending increase firms' R&D spending much more than tax incentives that are based on the...