The paper examines how country tax differences affect a multinational enterprise's choice to centralize or de-centralize its decision structure. Within a simple model that emphasizes the multiple conflicting roles of transfer prices in MNEs - here, as a strategic pre-commitment device and a tax...

Most FDI takes place between the developed countries, which suggests that the market-seeking motive is important for understanding FDI. However, given the stylized fact that trade barriers (e.g. transportation costs and financial barriers) have declined over the past 20 years, models that aim to...

This paper analyses the development of the ratio of corporate taxes to wage taxes using a simple political economy model with internationally mobile and immobile firms. Among other results, our model predicts that countries reduce their corporate tax rate, relative to the wage tax, either when...

It is tricky to design local regulations on global externalities, especially so if firms are mobile. We show that when costs and outside options are firms’ private information, the threat of firm relocation leads to local regulations that are stricter, not looser. This result is general and...

This paper analyzes the initial impact and recovery of globally engaged firms from the COVID-19 crisis. It uses rich survey data of nearly 65,000 firm-year observations in 45 countries spanning three waves of data collection. The findings are organized in a series of stylized facts, which...

Firm-to-firm relationships in global value chains create opportunities for North-South technology diffusion. This paper studies technology transfer in value chains when contracts are incomplete and input production technologies are imperfectly excludable. The paper introduces a new taxonomy of...

Did multinational production (MP) exacerbate or mitigate the collapse of international trade during the Great Recession? What role did MP and trade links play in propagating economic shocks across countries? I resolve the “Multinationals’ Resilience Puzzle” during the Great Recession by...

NGO campaigns against firms with value chains involving production in developing and emerging economies are a salient feature of economic globalization. What determines the patterns of the internationalization of NGO campaigns? Stylized facts obtained from recently available data containing 102...

The paper investigates different implications of theoretical models for hierarchical structure. A sample of 6578 firms in the Brazilian manufacturing industry is considered and explanatory factors pertaining structural characteristics, network technology, technological innovations, managerial...

Rewards to prevent supervisors from accepting bribes create incentives for extortion. This raises the question whether a supervisor who can engage in bribery and extortion can still be useful in providing incentives. By highlighting the role of team work in forging information, we present a...