In a two-country model of endogenous growth with international knowledge spillover, corporate income tax competition reproduces the second-best allocation attained by tax harmonization, despite complex externalities. This stems from the positive spillover effect across the border and free...

Trade does matter for the international transmission of knowledge. And the indirect trade-related transmission of knowledge is at least as important as its direct transmission.An influential literature argues that trade promotes the flow of knowledge and the transmission of technology between...