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This paper examines the factors influencing the globalization of R&D, with a particular focus on the role of tax policy, using panel data for 25 OECD countries over the period 1980- 2005. Two measures of globalization are considered - R&D directly financed from abroad and R&D expenditure by affiliates of US Multinational Enterprises (MNEs). The econometric analysis, which controls for other determinants of inter-country differences in R&D investment, finds no evidence that host country tax policy is an important determinant of MNE location decisions or in attracting cross-border contract R&D.
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