functions for 18 OECD countries. We find that corporate tax rate and public investment are endogenous and that a decline of 20 …% in the corporate tax rate, driven by competition, reduces public investment by 0.5% to 0.9% of GDP. We also find evidence …

This paper highlights the importance of different investment motives and to what extend they affect the responsiveness … to corporate taxation. In particular, we discuss how to classify investment as non-related, horizontal, vertical and … this, we examine the effects of host-country corporate taxation on the volume of investment within related firms (i.e., the …