Corporate tax competition can lead to lower corporate tax rates and reduced public investment. A study shows that when the tax rate drops from 45% to 30%, public investment decreases by 0.4% of output in the long term and three times more in the short term. Research on 21 OECD countries confirms that a 15% decrease in the tax rate results in a 0.6% to 1.1% reduction in public investment. International competition affects both corporate tax rates and public investment policies.