We carefully review the recent Italian reform of business taxation, compare it with other international experiences and theoretical proposals, and calculate its effects on the cost of capital and on the effective average corporate tax rate. We argue that the Italian reform is an original attempt...

This paper studies the effects of regulatory constraints on firm's irreversible investment decisions. The RPI - x rule is compared to a profit sharing rule, which increases the x factor in case profits go beyond a given level. When the firm has an option to delay investment, these rules have the...

Foreign investment decisions of firms are often characterized by investment irreversibility, uncertainty, and the ability to choose the optimal timing of foreign investments. We embed these characteristics into a real option theory framework to analyze international competition among countries...