There have been many empirical studies investigating the impact of taxation on the location and scale of investment, and on the use of debt finance to shift profits from high tax to low tax jurisdictions. Yet these two types of response to taxation have almost always been studied independently. A recent CBT research project seeks to link the two. Specifically, it aims to investigate how the incentive to shift profit affects decisions regarding investment. To do so, it exploits a tax reform in Germany that reduced the corporation tax rate by 10 percentage points. While this directly affected the incentive to undertake investment in Germany for all companies, it also had the effect of reducing the incentive for multinational companies to use debt finance in Germany to shift profits elsewhere. Comparing changes in investment after the tax reform for multinational companies relative to domestic companies, it is in principle possible to identify any indirect effects of this profit shifting on investment by multinational companies in Germany. The study finds first that multinational companies did reduce their borrowing in Germany following the reform. It also finds that multinational companies reduced their investment in Germany relative to domestic companies. These results suggest that the opportunity to shift income abroad has a material effect on the extent to which corporation tax acts as a disincentive to invest.