Short summary in 5 tweets below
Main point is that limits to profit shifting increase the effective cost of investing in the US since multinationals can’t shift profits to tax havens.
This figure shows limits to profit shifting raise cost of investing from \tilde \rho_0 to \tilde \rho_1:
Here is a quick summary of the paper in 5 more tweets: \begin{thread} 1- We show OLS with Fixed Effects (FE) is generally not a consistent estimator of Average Treatment Effects (ATE) when effects are heterogeneous. We show FE biases in favor of groups with higher VARIANCE in treatment: