Jordan Barry (USC) presents Tax and the Boundaries of the Firm (with Victor Fleischer (UC-Irvine; Google Scholar)) at Duke today as part of its Tax Policy Workshop hosted by Lawrence Zelenak:

We analyze how income taxes distort firms’ decisions regarding what to produce themselves ("make") or purchase from others ("buy") along a number of dimensions. Many of these provisions expand the boundary of the firm; others contract it. Importantly, the expansions and contractions generally operate on different points, and thus do not offset each other, making each distortion problematic.

Our framework provides insight into a number of key tax policy questions, including the merits of worldwide versus territorial tax systems, the economic cost of the corporate tax, and the effects of the Tax Cuts and Jobs Act of 2017.