This study provides evidence on the causal impact of debt shifting activities of multinational companies (MNC) on their capital accumulation. The identification strategy exploits the corporate tax rate cut of 10%-points in Germany 2008 as a quasi-natural experiment. This reform reduced...

Subsidies for renewable energy sources are increasing around the globe and amounted to more than 100 billion euro in 2013. This study aims to answer whether the subsidies only ensure that green electricity plants are profitable or whether other market participant - as, for example, landowners -...

We investigate the importance of firm-bank relationships for the international transmission of bank distress to the real economy. Using a large panel of matched financial statements of firms of all sizes and their relationship banks in Germany, we find that banks with losses from proprietary...

Tax competition for capital has led to a trend where many countries levy lower taxes on interest income, often introducing differential taxation between interest and business income. This study analyzes the effect on firm debt usage. We exploit Germany’s 2009 tax reform, which introduced a...

This study analyses whether multinational companies (MNCs) that are able to reduce their tax burden on capital by shifting profits to low tax jurisdictions invest more than domestic firms. To study the relationship, I exploit a massive corporate tax rate cut of 10%-points in Germany 2008 as a...

Theory suggests that large firms are more likely to engage in lobbying behaviour and have better bargaining positions against their host governments than smaller entities. Conditional on jurisdiction size, public policy choices are thus predicted to depend on the shape of a jurisdiction's firm...

This paper assesses the impact of public R&D on firm R&D using patent application data on the county and firm level in Germany. We address the endogeneity of public R&D by employing an instrumental variable estimator that uses lagged institutional funding for research institutes and universities...

We examine the effect of local business taxation and local public good and service (PIGS) provision on the number and spatial distribution of new firms. The analysis draws on panel data for the universe of firm foundations in German municipalities, matched to municipalities' local business tax...

This paper assesses the differential impact of the local availability of grammar schools on local employment depending on the openness of a jurisdiction, measured by commuting costs. Commuting costs matter as they influence workers' reservation wage. While the reservation wage depends on public...

This paper provides a legal and economic analysis of the European Commission's recent proposals for reforming the application of VAT to financial services, with particular focus on their 'third pillar', under which firms would be allowed to opt in to taxation on exempt insurance and financial...