In this paper we analyze the microeconomic determinants and effects of FDI using data on a representative sample of establishments in the German south-west region of Baden-WürttemƠberg. With 11 million inhabitants, Baden-Württemberg exceeds the size of Sweden or Belgium. Furhter we discuss...

We set up a model to characterize the reaction functions of governments competing for mobile capital by simultaneously setting both the business tax rate as well as the level of provision of a productive public input. Using a rich data set of local jurisdictions, we then test the predictions of...