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We study tax and non-tax incentives for corporate inversions in a hand-collected dataset of 691 inversions out of 11 home countries into 45 host destinations over the 1996-2013 period. Even though lower tax rates generally attract inversions, only two in five firms invert into tax havens and two thirds of firms invert into host destinations with lower statutory tax rates than those faced at home. Moreover, firms invert to geographically close destinations with similar governance standards. Using staggered country-pair level policy changes as experiments, we find that host-country governance may explain why not all firms invert.

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