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...

In the debate on the impact of illicit capital flows on developing countries, the view is widespread that profit shifting to low tax jurisdictions undermines the ability of developing countries to raise tax revenue. While the shifting of income out of developed countries is a widely debated...

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...

Corporate patents are perceived to be the key profit-drivers in many multinational enterprises (MNEs). Moreover, as the transfer pricing process for royalty payments is often highly intransparent, they also constitute a major source of profit shifting opportunities between multinational...

This paper assesses the agglomeration pattern of four-digit industries in Germany using a rich data set on the population of German firms. To identify geographical agglomeration, we follow the distance based approach of Duranton and Overman (2005) and find that the location pattern of 78% of our...

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

Several recent papers show that increases in the capital stock at one multinational affiliate tend to raise the capital stock at other locations, rather than to reduce it. In this paper, we theoretically and empirically explore the consequences of these findings for national corporate tax...

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...

This paper assesses the agglomeration pattern of four-digit industries in Germany using a rich data set on the population of German firms. To identify geographical agglomeration, we follow the distance based approach of Duranton and Overman (2005) and find that the location pattern of 78% of our...

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.