This paper examines the relationship between foreign and domestic investment activity of multinational enterprises. The empirical analysis is based on micro data of German firms and their operations at home and abroad, including information on investment in fixed assets. The empirical approach,...

Tax incentives are a key component of governments’ investment policy mix as they directly impact companies’ tax burden. In this paper, we illustrate the EU’s tax attractiveness as investment location over time in terms of effective average tax rates and evaluate potential tax reform...

Foreign-owned subsidiaries make significant contributions to national Research and Development (R&D) in many host countries. Policymakers often support subsidiaries through R&D grants and R&D tax credits. A key objective of this funding is to leverage R&D-driven firm performance benefits for the...

This paper analyzes the influence of the structure of collective wage bargaining on direct investment abroad. A wage negotiations model shows that high productive firms benefit from centralized bargaining and invest therefore less abroad than under dezentralized bargaining. An empirical study...

We set up a two-country, regional model of trade in financial services. Competitive firms in each country manufacture non-traded consumer goods in an uncertain productive environment, borrowing funds from a bank in either the home or the foreign market. Duopolistic banks can choose their levels...