This paper studies tax competition between two countries for an international producer. The international producer chooses where to locate its headquarters and whether to serve the overseas market through exports or foreign direct investment (FDI) and local supply. We show that, in the absence...

This paper examines the consequences of model misspecification using a panel data model with spatially autocorrelated disturbances. The performance of several maximum likelihood estimators assuming different specifications for this model are compared using Monte Carlo experiments. These include...

This paper compares domestically and foreign-owned plants with respect to their debt-toassets ratio and analyzes to which extent the difference is systematically affected by corporate taxation. To derive hypotheses about influence of corporate taxation on a firm's debt financing we adapt a...

The establishment of a new preferential trade agreement (PTA) or the expansion of an existing one alters the incentives of non-members to participate in a PTA. This can lead to a domino effect whereby non-members join an existing PTA. Or it can lead a pair of countries to establish a new PTA. We...

This paper formulates an empirical model to estimate the impact of endogenous new regional trade agreement (RTA) membership on trade structure. The likelihood of new RTA membership is influenced by economic fundamentals such as country size, factor endowments, and trade and investment costs. In...

This article proposes to account for the differences in the importance of transport costs, depending on characteristics of trading partners. In a multiregion model of trade in differentiated goods we expect a smaller impact of transport costs on a country's exports as a share of importer gross...

This paper develops an estimator for higher-order spatial autoregressive panel data error component models with spatial autoregressive disturbances, SARAR(R,S). We derive the moment conditions and optimal weighting matrix without distributional assumptions for a generalized moments (GM)...

We incorporate the now standard knowledge-capital model of multinational firms in a new economic geography setting. The theoretical predictions of our model suggest that unskilled labor mobility leads to less concentration of production than skilled labor mobility does. This is in line with...

This paper investigates empirically the role of taxes on labor for the stock of expatriates and the migration flows of skilled workers. Given the increasing mobility of labour, especially of high-skilled people and expatriates, it is interesting to see to what extent labour income taxes and...