This paper examines the effect of tax incentives in the form of bonus depreciation on the quality of investment. Using the expiration of tax incentives via bonus depreciation in East Germany and a representative panel of West German establishments, we show that bonus depreciation significantly...

This paper examines whether the profit-shifting trend in Europe during 2003–2013 can be explained by tax policy changes. Consistent with prior literature, we find that affiliates' profits are sensitive to tax rate changes. However, we document that tax base–broadening reforms have mitigated...

We investigate whether technological change predicts tax policy changes in 34 OECD countries from 1996 to 2016. To examine tax policy reactions, we construct two new country-level indexes, one capturing tax-related investment incentives and one capturing anti-tax avoidance rules in a country. We...

This paper examines the effect of tax incentives in the form of bonus depreciation on the quality of investment. Using the expiration of tax incentives via bonus depreciation in East Germany and a representative panel of West German establishments, we show that bonus depreciation significantly...

Most corporate tax codes constrain capital investment because the cost of capital investment is usually not fully deductible from taxable income. We examine whether firms avoid taxes to loosen such tax code constraints on their investment. Exploiting increases in capital investment incentives...

This paper studies the effect of corporate taxes on investment. Since firms with a foreign parent have more cross-country profit shifting opportunities than domestically owned firms do, their effective tax rate and, consequently, their tax-induced costs to investment are lower. We therefore...