This paper intends to combine two fields in the economic literature by examining empirically the FDI pattern – horizontal versus vertical – within the European Union and the relevance of trade integration as a potential determinant of investment flows over the period 1995-2009. We capture...

Institutions - the structures of rules and norms governing economic transactions - are widely assigned a central role in economic development. Yet economic history is still dominated by the belief that institutions arise and survive because they are economically efficient. This paper shows that...

Taxes levied on production processes (e.g. VAT), are today a very important source of government revenues in developed economies. Theories of optimal taxation conclude that these taxes are detrimental to production efficiency, when firms operate in perfectly competitive markets. These theories...

Using six years of firm-level data covering 224 regions of the enlarged European Union, we evaluate the importance to a firm of locating its activities (production, headquarters, R&D, logistics and sales) close together. We find that, after controlling for regional characteristics, being closely...

This paper investigates the conditions under which partial harmonization for capital taxation is sustained in a repeated interactions model of tax competition when there are three heterogenous countries with respect to their capital endowments. We show that regardless of the structure of the...

The Middle East was once seen as a medieval great globalized force. Nowadays it shows one of the lowest intra-regional trade in the world and therefore it is claimed that the region is poorly integrated. Yet, with the steady .ow of workers across national borders of the Middle East is this...

This paper reviews the economic effects of the EU Savings Taxation Directive. The Directive aims at enabling taxation of foreign interest payments received by individuals in accordance with the rules of their State of residence. The data suggest that the Directive, which is based on automatic...

This paper investigates regulation on corporate income taxation with multinationals and transfer pricing. We recommend full cooperation within the EU if profit shifting costs are sufficiently low and cannot be influenced to a large extend. Otherwise, high profit shifting costs or the potential...