Now showing 1 - 10 of 49
  • Publication
    The Real Effects of Tax Havens
    (University College Dublin. School of Economics, 2023-10) ; ; ;
    It is common to summarize the impact of tax havens as a shift of tax revenues from high to low-tax jurisdictions. This chapter discusses the economic impact of tax havens that goes beyond a zero-sum transfer of the tax base, what we label real effects. We review the literature and focus on exploring how profit shifting affects employment, investment, and innovation in firms. We consider in turn how real effects shape market structure and their implications in general equilibrium. In conclusion, we propose some potential pathways for future research in terms of methodology and areas that we deem promising for further exploration.
      96
  • Publication
    Patent Boxes and the Success Rate of Applications
    (University College Dublin. School of Economics, 2021-04-21) ; ;
    Patent boxes significantly reduce the corporate tax rate applied to income earned from a patent. This incentivizes firms to increase the likelihood of a patent application being granted by creating more novel research and using more successful legal representation when filing the application. Conversely, it supports submitting applications for marginally novel innovations that otherwise would not have been submitted, lowering the probability of success. We use data from applications to the European Patent Office from 1978 to 2019 and find that the introduction of a patent box increases the average success rate of applications from large, corporate innovators by 6.9 percentage points. This impact only materializes two years after a patent box takes effect, suggesting that improved research effort is the dominant response by firms. Therefore patent boxes may help to increase innovation novelty and improve the overall quality of research.
      250
  • Publication
    Tariffs Versus VAT in the presence of heterogeneous firms and an informal sector
    (University College Dublin. School of Economics, 2010-04-05) ;
    The debate over the use of tariffs or value added taxes in developing countries has focused on the difficulty of collecting VAT from the informal sector of the economy. This paper contributes by considering this issue with heterogeneous firms and endogenous entry. This yields two new results. First, a cut in the tariff in and of itself can reduce the size of the informal sector. Second, the imposition of a VAT need not increase the number of informal firms. In fact, for many parameterizations of the model, higher VAT reduces informality. Despite this, whether a revenue neutral shift from tariffs to VAT increases or decreases welfare depends on the parametrization. Therefore while this move may be welfare improving in some cases, it is not a one-size fits all policy.
      325
  • Publication
    Hops, Skip & a Jump: The Regional Uniqueness of Beer Styles
    (University College Dublin. School of Economics, 2020-12) ; ; ;
    Perhaps more than any other product, beer evokes the place it was made. Weißbier and Germany, dubbels and Belgium, and most of all, Guinness and Ireland. Part of what makes these beers so memorable is what sets them apart and gives them their ‘taste of place’. Many studies have tried to place that taste, and due to a lack of detailed data, have relied largely on qualitative methods to do so. We introduce a novel data set of regionalized beer recipes, styles, and ingredients collected from a homebrewing website. We then turn to the methods of evolutionary economic geography to create regional ingredient networks for recipes within a style of beer, and identify which ingredients are most important to certain styles. Along with identifying these keystone ingredients, we calculate a style’s resiliency or reliance on one particular ingredient. We compare this resiliency within similar styles in different regions and across different styles in the same region to isolate the effects of region on ingredient choice. We find that while almost all beer styles have only a handful of key ingredients, some styles are more resilient than others due to readily available substitute ingredients in their region.
      233
  • Publication
    Greenfield FDI and skill upgrading
    (University College Dublin. School of Economics, 2012-03) ;
    Globalisation is one of the primary accused culprits of growing income inequality in the developed world. In particular, outbound foreign direct investment (FDI) is often associated with general “skill upgrading" in the home country, that is, a shift in relative labour demand from low skilled workers towards more skilled workers. Nevertheless, the empirical evidence indicates that such effects are small at best, especially in contrast to those for overall trade in intermediates (which includes both intra-firm trade and foreign outsourcing). In response, we utilise a proprietary dataset on greenfield FDI. In contrast to M&A FDI, which can represent acquisition of new technologies or elimination of competitors, greenfield FDI may be more closely linked to skill upgrading, especially when its done to take advantage of international differences in factor prices. Given that our data delineate FDI by function as well as by destination country, we are able to capture the different motives of FDI and to account for the fact that different functions in different countries may substitute for different skill levels at home. Using these data in conjunction with industry-level data on seventeen developed home countries, we find that greenfield FDI results in polarised skill upgrading, i.e. an increase in the relative share of employment and compensation of the most skilled workers to the detriment of the medium skilled workers. This impact is strongest for support services (e.g. call centres), knowledge services (e.g. R&D), and retail FDI with little indication of an impact from FDI in other functions. Our estimates suggest that the change in the high skilled compensation share explained by support services is of the same order of magnitude as what is found in other studies for trade in services. Unlike those studies, however, we find that demand for medium skilled workers falls from outbound FDI whereas that of the lowest skilled workers remains unchanged. Thus, in contrast to overall trade in services where globalisation leads to increased income inequality between the lowest skilled workers and other groups, increased outbound FDI leads to an increased gap between the most skilled and the moderately skilled workers. FDI then has parallels to the results from the labour literature estimating the non-monotonic impacts on the demand for skills of computerisation and service offshoring.
      348
  • Publication
    Tariff-induced transfer pricing and the CCCTB
    (University College Dublin. School of Economics, 2013-09)
    The common consolidated corporate tax base has been suggested as a way to curb tax avoidance by allocating profits across borders via a formula. This paper demonstrates that when transfer pricing occurs both for tariff and tax minimization, that moving from separate accounting to formula apportionment can actually increase transfer pricing. This, combined with arm's length pricing regulations, can result in lower revenues for high-tax countries and lower overall revenues. This casts additional doubt over whether such a move would have its intended, revenue-enhancing effects.
      188
  • Publication
    The Glass Border: Gender and Exporting in Developing Countries
    (University College Dublin. School of Economics, 2015-11) ;
    Using firm level data across 99 developing and transition economies, we explore the productivity differences between firms depending on their export status and the gender of their owners. We find that female-owned exporters have roughly half the exporter productivity premium of comparable male firms. This is particularly true for larger firms, suggesting that this difference may reflect greater difficulty in implementing learning by exporting for female-owned firms. Nevertheless, we also find evidence consistent with selection into exporting where female-owned firms face relatively higher export costs. Together, these point to significant discrimination barriers female firms face when exporting.
      667
  • Publication
    Hops, Skip and a Jump: The Regional Uniqueness of Beer Styles
    (University College Dublin. Spatial Dynamics Lab, 2023-06-12) ; ; ;
    Perhaps more than any other product, beer evokes its place of origin. Part of what makes every pint of Guinness or stein of Paulaner so memorable is what sets them apart and gives them their unique "taste of place." This chapter explores the geographical differentiation of beer. To do so, we collect data on regional beer recipes, styles, and ingredients from a homebrewing website. We then employ Evolutionary Economic Geography (EEG) methods and create weighted co-occurrence networks for the ingredients within each style. We use these networks to identify which ingredients are most important to each beer style, measure a style’s robustness, and compare differences between geographically close and distant styles. While previous literature focuses on the related diversification of regions, we use these methods to examine the differences within the same product and across many regional styles and flavours. Combining the EEG methods with this unique ingredients dataset, we show that almost all beer styles rely on only a handful of key ingredients. Yet some regional beers are more robust than others due to readily available substitute ingredients in their region. Likewise, we demonstrate that styles originating in close geographic proximity are more similar in their use of ingredients.
      95
  • Publication
    The Impact of Special Economic Zones on Exporting Behavior
    (University College Dublin. School of Economics, 2015-11) ;
    Using firm level data from Africa and Asia, we estimate the impact of being in a special economic zone (SEZ) on a firm’s probability of exporting, export intensity, and value of exports. At the extensive margin, we find that SEZ firms in open economies are 25% more likely to export than their non-SEZ counterparts, with a large negative effect in closed economies. At the intensive margin, we find that SEZs increase the value of exports, but only in countries with barriers to imports where the estimate increase is 3.6%. Thus, the estimated effect of introducing an SEZ can be meaningful, but is heavily contingent on the local economic environment.
      654
  • Publication
    A race to the bottom in labour standards? An empirical investigation
    (University College Dublin. School of Economics, 2011-11) ;
    Among the many concerns over globalization is that as nations compete for mobile firms, they will relax labour standards as a method of lowering costs and attracting investment. Using spatial estimation on panel data for 148 developing countries over 18 years, we find that the labour standards in one country are positively correlated with the labour standards elsewhere (i.e. a cut in labour standards in other countries reduces labour standards in the country in question). This interdependence is more evident in labour practices (i.e. enforcement) than in labour laws. Further, competition is most fierce in those countries with already low standards.
      862