This paper estimates the causal effect of corporate tax hikes on firm investment based on more than 1,400 local tax … changes. By observing planned and realized investment volumes in a representative sample of German manufacturing firms, we can … study how tax hikes induce firms to revise their investment decisions. On average, the share of firms that invest less than …

, we show that more trust in a relationship is associated with higher idiosyncratic investment by suppliers and better part … relationships involving higher trust, buyers are able to induce higher investment and more intense competition among suppliers - but …