We present a model in which governments bid for firms by taxing/subsidizing setup costs. Firms choose both the number and the location of the plants they operate, and the equilibrium industry structure is affected by governments' subsidy choices. We show that the endogenous presence of...

We develop a model of capital tax/subsidy competition in which imperfectly competitive firms choose both the number and the location of the plants they operate. The endogenous presence of horizontal multinationals is shown to attenuate the “race to the bottom” and yields some results that...

We investigate the spatial distribution and organization of an imperfectly competitive industry when firms may choose to operate more than a single production unit. Focusing on a short-run setting with a fixed mass of firms, we first fully characterize the spatial equilibria analytically....

We investigate the spatial distribution and organization of an imperfectly competitive industry when firms may choose to operate more than a single production unit. Focusing on a short-run setting with a fixed mass of firms, we fully characterize the spatial equilibria analytically. Comparing...

We develop a model of capital tax competition in which imperfectly competitive firms choose both the number of plants they operate and their location. When compared to models with single-plant firms, the presence of multinationals reverses some standard results. First, instead of being...

We study the impact of transfer pricing rules on sales prices, firms’ organizational structure, andconsumers’ utility within a two-country monopolistic competition model featuring source-basedprofit taxes that differ across countries. Firms can either become multinationals, i.e., they serve...

We investigate the role of the transport sector in structuring the location of economic activitywithin two-region economic geography models of the footloose capital and core-peripherytypes. In our setting, competitive carriers offer transport services for shipping manufacturedgoods across...

We develop a model of commodity tax competition with monopolistically competitive internationallymobile firms, transport costs, and asymmetric country sizes. We investigate the impacts of noncooperativetax setting, as well as of tax harmonization and changes in the tax principle, in both...

We distill the main insights from recent trade models on firms' responses toglobalization. Our primary aim is to assess the economic impact and the welfareimplications of the resulting reallocation of resources across frims and countries. In sodoing, we bring theory into life through the...

The world is replete with spatial frictions. Shipping goods across cities entails trade frictions. Commuting within cities causes urban frictions. How important are these frictions in shaping the spatial economy? We develop and quantify a novel framework to address this question at three...