Davies, Ronald B.; Egger, Hartmut; Egger, Peter - In: Canadian Journal of Economics 43 (2010) 2, pp. 704-727
This paper studies the role of profit taxation for an international firm's decision upon how to penetrate a foreign market - through exports or through foreign direct investment (FDI) and local supply. We show that with harmonized taxes the international firm may choose FDI even though this has...