We develop an equilibrium model of real and financial market integration in which real firms and financial investors independently decide on their investment into different locations (countries). We show that, in the presence financial frictions, firms' real investment choices become strategic...

The financial crisis has opened up a global debate on the taxation of the financial sector. A number of international policy initiatives, most notably by the G20, have called for major changes in the tax treatment of financial institutions and transactions as well as individuals working in the...