|**Cross‐country**|De Mooij and Ederveen (2008)|A 1 percentage point increase in<br>the host country’s corporate tax<br>rate|On average, it decreases FDI by 3.3<br>percent. A 4.4 standard deviation<br>suggests large variation across<br>studies.|
|---|---|---|---|
|**Cross‐country**|Klemm and Van Parys (2012)|A 10 percentage point increase in<br>the host country’s corporate<br>income tax rate|It lowers FDI by 0.31‐0.32 percentage<br>points of gross domestic product<br>(GDP).|
|**Cross‐country**|Desai, Foley, and Hines (2002)|A 10 percent increase in the host<br>country’s income tax|<br>It results in a 5 percent lower FDI<br>from U.S. multinational companies,<br>and a 0.9 percent lower return on<br>assets.|
|**Cross‐country**|James (2013)|A reduction in marginal effective<br>tax rates from 40 to 20 percent|It raises FDI by 1 percent of GDP for<br>countries ranked in the bottom half<br>of_Doing Business_indicators, and has<br>an 8 times greater effect on countries<br>in the top half.|
|**United Kingdom**|Criscuolo and others (2012)|A 10 percent increase in<br>investment subsidies offered to<br>manufacturing firms under the<br>Regional Selective Assistance<br>program|<br>It results in a 7 percent increase in<br>employment through both intensive<br>(3.6 percent) and extensive (net<br>entry) margins.|
|**United Kingdom**|Devereux Griffith and Simpson|A £100000 increase in the|It results in a 1 percent increase in|
||, ,<br>(2007)|,<br>expected grant offered to<br>manufacturing firms under the<br>Regional Selective Assistance<br>program|<br>the probability of a greenfield<br>investment, for example, from 1<br>percent to 1.01 percent. An increase<br>of 10 foreign plants in an area<br>increases the probability of another<br>location investment by 1.032<br>ercent|
|**United Kingdom**|Wren and Jones (2011)|Every £25 million in grants<br>offered under the Regional<br>Selective Assistance program|p.<br>It results in a one percentage‐point<br>increase in the regional share of FDI<br>or, equivalently, six additional inward<br>FDI projects assessed to generate an<br>average of 150 jobs or £4.12 million.|
|**United States**|Azémar and Desbordes (2010)|A 10 percentage point drop in the<br>host country’s average effective<br>tax rate|<br>It results in 7.7 percent higher sales<br>of U.S. multinational affiliates in the<br>United States, and a 1.2 percent<br>increase in sales of local affiliates.|
|**_Behavioral incentives_**||||
|**German municipalities**|Becker Egger Merlo (2012)|A 1 percent reduction of the|It results in a 0.45 percent increase in|
||, ,|<br>municipal business tax rate levied<br>on profits (equivalent to a decline<br>of about 0.14 percentage points)|<br>the number of legally independent<br>foreign‐owned firms. The average<br>municipality would have to reduce its<br>business tax rate by about 2.2<br>percentage points (or 15 percent)<br>from its average level to attract one<br>forein multinational enterrise|
|**Texas**<br>|Freedman (2013)|Provision of location‐based<br>incentives in Empowerment<br>Zones (defined as census block<br>groups with 18‐22 percent<br>poverty rates)|g p.<br>It results in a 1–2 percent yearly<br>increase in resident employment.<br>The effects are concentrated in jobs<br>paying less than $40,000 per year in<br>the construction, manufacturing,<br>retail trade, and wholesale trade<br>industries.|
|**United Kingdom**|Duranton, Gobillon and<br>Overman (2011)|Increase in local property taxation|<br>It results in a decrease in<br>manufacturing employment at an<br>elasticity coefficient estimated at<br>about ‐1. There is no effect on entry<br>of new establishments|
|**United States**|Hanson and Rohlin (2011)|Provision of location‐based tax<br>incentives (wage credit) in<br>Empowerment Zones (defined as<br>urban areas with at least 20<br>percent of the population living in<br>poverty,and a 6.3percent|.<br>It results in a 0.16 ‐0.30 percentage<br>point increase in the share of retail<br>and service sector establishments in<br>the designated area, and a 0.16‐0.19<br>percentage point decrease in the<br>share of establishments in the|

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