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- PublicationInternationalisation of Services, Productivity and Economic Growth: Literature ReviewOver the past decade there has been an increased internationalisation of services via trade and investment as well as an increased international outsourcing of services. However, to date there is a lack of solid empirical evidence on the extent and determinants of the internationalisation of services in the European Union and its effects on productivity, employment growth and competitiveness. This study discusses recent theory and empirical evidence on the internationalisation of services and its effects on firm performance. In addition, it outlines existing knowledge gaps and proposes a research agenda and methodology to address them.
- PublicationThe Impact of Taxes on the Extensive and Intensive Margins of FDIThe design of optimal tax policy, especially with respect to attracting FDI, hinges on whether taxes affect multinational firms at the extensive or the intensive margins. Nevertheless, the literature has not yet explored the simultaneous impact of taxation on FDI on these two margins. Using firm-level cross-border investments into Europe during 2004-2013, we do so with a Heckman two-step estimator, an approach which also allows us to endogenize the number of investments and include home country and parent firm characteristics. We find that taxes affect both margins, particularly for firms that invest only once, with 92 percent of tax-induced changes in aggregate inbound FDI driven by movements at the extensive margin. In addition, we find significant effects of both home country and parent firm characteristics, pointing towards the granularity of investment decisions.
- PublicationWhat Determines the Diffusion of ICT at Firm Level?Empirical evidence indicates that the diffusion of ICT has been uneven across firms, industries, regions and countries. From the policy perspective, to the extent that a wide and fast diffusion of ICT is desirable, it is essential to understand what factors are likely to influence the diffusion of ICT. New technologies are adopted at different dates and speed depending on firm characteristics and the characteristics of the environment in which firms operate. To understand the diffusion of ICT as a new technology it is essential to uncover the factors that explain the variation in the rates of its adoption and use across firms, industries, regions and countries.