An increase in the taxation of foreign a¢ liates reduces domestic investment, as has recently been empirically shown in Becker and Riedel (2012). This paper investigates the implication of this ?nding for tax competition. It is shown that an increase in the number of multinational ?rms (in...

This paper measures the relative importance of quality and quantity effects of corporate taxation on foreign direct investment. Quantity is affected if corporate taxes reduce the equilibrium stock of foreign capital in a given country. Quality effects arise if taxes decrease the extent to which...

Several recent papers show that increases in the capital stock at one multinational affiliate tend to raise the capital stock at other locations, rather than to reduce it. In this paper, we theoretically and empirically explore the consequences of these findings for national corporate tax...