Working Papers

"Concentration, Market Power and International Tax Competition". (Draft Available Soon)

Abstract: Since the 80s, firms’ market power has increased, and Corporate Income Tax (CIT) rates have decreased globally. This paper provides a theoretical framework to explain these diverging trends. I develop a general equilibrium model with imperfect competition and strategic interaction among firms, where firms have the possibility to shift profits abroad toward a tax haven. I find that increasing firms’ market power enhances their incentives to engage in profit shifting, via larger profits. Profits rise through (i) larger markdowns and (ii) reallocation of market share towards more productive firms. A government, competing to attract firms’ profits, sets low tax rates to prevent local firms from evading toward tax haven(s). The competition is stronger, i.e. lower tax rates, when firms have high market power. Besides, we find that profit shifting widens the disparities among already heterogeneous firms and endogenously increases the level of market power in the economy, favouring the most productive firms.

"The supply of educated workers and the US' occupational dynamism". (Draft Available Soon)

"Is work from home here to stay?" with Fabio Cerina and Luca Deidda.