This paper argues that profit-shifting activities exist for multi-jurisdictional enterprises (MJEs) under a tax system of consolidation and formula apportionment (FA). A theoretical model discusses how a MJE can exploit strategically its impact on the definition of the consolidated group. The...

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...

This paper examines the impact of tax incentives on corporate research and development (R&D) activity. Traditionally, R&D tax incentives have been provided in the form of special tax allowances and tax credits. In recent years, several countries moreover reduced their income tax rates on R&D...

We present empirical evidence suggesting that the effect of the host country corporate tax rate on the debt ratio of multinational affiliates in developing economies is positive and larger than the same effect for affiliates in developed economies.

Corporate patents are important assets in the modern economy, where knowledge is highly valued. In many multinational enterprises (MNEs), they constitute a major portion of the business's value. The intra-firm transfer pricing process for patent-related royalty payments is moreover often highly...

Using the German local business tax as a testing ground, we empirically investigate the impact of firm agglomeration on municipal tax setting behavior. The analysis exploits a rich data source on the population of German firms to construct detailed measures for the communities' agglomeration...

We use a laboratory experiment to investigate the behavioral effects of obligations that are not backed by binding deterrent incentives. To implement such ‘expressive law’ we introduce different levels of very weakly incentivized, symmetric and asymmetric minimum contribution levels...

We use a laboratory experiment to investigate the behavioral effects of obligations that are not backed by binding deterrent incentives. To implement such expressive law' we introduce different levels of very weakly incentivized, symmetric and asymmetric minimum contribution levels (obligations)...

This paper presents a new approach to estimating the existence and magnitude of tax-motivated income shifting within multinational corporations. Existing studies of income shifting use changes in corporate tax rates as a source of identification. In contrast, this paper exploits exogenous...

Recent studies suggest that multinational firm activities at home and abroad are positively correlated which may be due to the use of common inputs (like marketing, patents, etc.). Then, a cost shock at one location may lead to reduced activity in all other locations within the firm. In this...