Davies, Ronald B.
https://scholarsbank.uoregon.edu/xmlui/handle/1794/3688
2024-03-29T15:07:20ZEstimating the Impact of Time-Invariant Variables on FDI with Fixed Effects
https://scholarsbank.uoregon.edu/xmlui/handle/1794/5130
Estimating the Impact of Time-Invariant Variables on FDI with Fixed Effects
Davies, Ronald B.; Ionascu, Delia; Kristjánsdóttir, Helga
This paper applies the panel fixed effects with vector decomposition estimator
to three FDI datasets to estimate the impact of time-invariant variables on FDI while
including fixed effects. We find that the omission of fixed effects significantly biases
several of these variables, especially those proxying for trade costs and culture. After
including fixed effects, we find that many time-invariant variables indicate the
importance of vertical FDI. We also find that by eliminating these biases, the differences
across datasets largely disappear. Thus, controversies in the literature that are driven by
differences in data sets may be resolved by using this estimation technique.
37 p.
2007-05-01T00:00:00ZTax Competition for Heterogeneous Firms with Endogenous Entry: The Case of Heterogeneous Fixed Costs
https://scholarsbank.uoregon.edu/xmlui/handle/1794/5118
Tax Competition for Heterogeneous Firms with Endogenous Entry: The Case of Heterogeneous Fixed Costs
Davies, Ronald B.; Eckel, Carsten
This paper models tax competition for mobile firms that are differentiated by
the amount of labor needed to cover fixed costs. Because tax competition affects the
distribution of firms, it affects both relative equilibrium wages across countries and
equilibrium prices. These in turn influence the equilibrium number of firms. From the
social planner's perspective, optimal tax rates are harmonized, providing the optimal
number of firms, and set such that income is efficiently distributed between private and
public consumption. As is common in tax competition models, in the Nash equilibrium
tax rates are inefficiently low, yielding underprovision of public goods. Furthermore,
there exist a variety of situations in which equilibrium tax rates differ. As a result, too
many firms enter the market as governments compete to be the low-tax, high-wage
country. This illustrates a new distortion from tax competition and provides an additional
benefit from tax harmonization.
39 p.
2007-02-01T00:00:00ZTax Competition for Heterogeneous Firms with Endogenous Entry
https://scholarsbank.uoregon.edu/xmlui/handle/1794/5116
Tax Competition for Heterogeneous Firms with Endogenous Entry
Davies, Ronald B.; Eckel, Carsten
This paper models tax competition for mobile firms that are differentiated by
the amount of labor needed to cover fixed costs. Because tax competition affects the
distribution of firms, it affects both relative equilibrium wages across countries and
equilibrium prices. These in turn influence the equilibrium number of firms. From the
social planner's perspective, optimal tax rates are harmonized, providing the optimal
number of firms, and set such that income is efficiently distributed between private and
public consumption. As is common in tax competition models, in the Nash equilibrium
tax rates are inefficiently low, yielding underprovision of public goods. Furthermore,
there exist a variety of situations in which equilibrium tax rates differ. As a result, too
many firms enter the market as governments compete to be the low-tax, high-wage
country. This illustrates a new distortion from tax competition and provides an additional
benefit from tax harmonization.
40 p.
2007-03-01T00:00:00ZCooperation in Environmental Policy: A Spatial Approach
https://scholarsbank.uoregon.edu/xmlui/handle/1794/3879
Cooperation in Environmental Policy: A Spatial Approach
Davies, Ronald B.; Naughton, Helen T. (Helen Tammela), 1976-
Inefficient competition in emissions taxes creates benefits from international
cooperation. In the presence of cross-border pollution, proximate (neighboring)
countries may have greater incentives to cooperate than distant ones as illustrated by a
model of tax competition for mobile capital. Spatial econometrics is used to estimate
participation in 37 international environmental treaties. Data on 41 countries from
1980-1999 reveal evidence of increased cooperation among proximate countries.
Furthermore, the results indicate that FDI usually increases treaty participation. We
also find that both OECD and non-OECD countries respond positively to OECD
countries’ participation but the response to non-OECD countries is primarily from
similar countries. This suggests that the rich countries may lead others in setting
environmental quality.
45 p.
2006-07-01T00:00:00Z