This paper uses a unique dataset to study the short term effects of downsizing on operational and financial performance of large German firms. In general, productivity and profitability after downsizing are -at the best -comparable to their pre-downsizing levels. During the downsizing event, the performance even drops. Moreover we make a distinction between firms downsizing because of a business downturn and firms downsizing to increase efficiency. Especially downsizing for the latter firms appears to be unsuccessful. JEL codes: G34, L19, L25, D24

This paper analyzes employment growth in Belgian multinational enterprises' headquarters relative to their affiliates. We find that headquarters have on average 2.5% more employment growth than their affiliates. When they go through restructuring headquarters reduce employment by 4.4% less than their affiliates and affiliates located further away from their headquarters suffer more. This effect almost doubles for firms that operate in manufacturing.

This paper analyses the impact of geographic dispersion on employment changes within multinationals. Building on earlier work of Landier et al. (2009, Review of Financial Studies 22, 3: 1119), we investigate whether corporate decision‐making within a multinational is affected by the distance between an affiliate and its headquarter. Our findings suggest a detrimental impact of distance on employees, by either an increased likelihood of observing a downsizing event, or by witnessing a larger decrease in the number of employees at distant locations during downsizing events. In addition, our results seem to relate the higher likelihood of observing a downsizing event to the role of social factors on decision making. The more visible a manager is in his community, the less likely he is to downsize proximate divisions.

This paper analyzes the sensitivity of Belgian outbound FDI to corporate taxation rates and economic clustering. Our approach involves detailed balance sheet data of the foreign affiliates as our proxy of FDI and a measure of regional knowledge spillovers as agglomeration variable. The results reveal that investments are sensitive to changes in fiscal policy, with an average tax sensitivity of around-1.5. We also pick up an effect of agglomeration economies: a regional increase in the number of own industry firms dampens tax sensitivity.

This paper looks at the effect of agglomeration economies on the tax sensitivity of investments in Belgian firms using detailed firm-level data. We find a negative effect of taxation on investment.However, this is dampened by the presence of agglomeration externalities. Our results hint to the importance of local labor market and supplying industries for firm investment decisions and follow the more nuanced view on tax competition of the New Economic Geography models. I thank the Flemish government for the funding of this project through the Steunpunt Fiscaliteit en Begroting. I also thank Joep Konings, Freddy Heylen en Carine Smolders for their support and comments.