Tax treaties are often viewed as a mechanism for eliminating tax competition, however this approach ignores the need for bargaining over the treaty’s terms. This paper focuses on how bargaining can affect the withholding taxes set under the treaty. In a simple framework, we develop hypotheses about patterns in treaty tax rates. A key determinant for these patterns is the relative size of bilate...

We develop and test the hypothesis that foreign direct investment promotes corporate governance spillovers in the host country. Using firm-level data on cross-border mergers and acquisitions (M&A) and corporate governance in 22 countries, we find that crossborder M&A activity is associated with subsequent improvements in the governance of the target firms’ local rivals. This positive spillover ...

This study discusses how outward foreign direct investment (FDI) can complement the inward FDI-based technological capability-building process, through an analysis of the Shanghai Automotive Industry Corporation case. When a firm is upgrading its technological capability, outward FDI can allow learners to have access to human-embedded skills and knowledge and other intellectual assets that are ...

using firm-level panel data for korean mnes, we make a distinction between being the only affiliate of a parent firm and being the one of the multiple affiliates of a parent firm. comparisons of correlations between purchases and sales of each group of the foreign affiliates show distinctive difference in the motivations of fdi and the multinational activities, due to the difference in the numb...

the foreign direct investment is a growth and development factor. today majority of countries will attract foreign capitals. but multinational companies perform investment in the political stability conditions. the political risk is dissuasive factor for foreign direct investment. in such qualification can suitable “political risk insurance” and help to developing countries for attract foreign ...

This paper empirically assesses United States direct investment in the European Union. In that respect, market size, growth rate, labor costs, export flows and tariff barriers have already been shown to influence U.S. foreign direct investment in the European Union. The present paper enlarges the field of knowledge on the matter by: (i) exploring the impact of two locational determinants of for...

There are two leading views on how financial crises turn into recessions. The first view highlights the importance of a troubled banking sector that cannot provide credit to domestic firms. The second view stresses the relevance of short-term borrowing in foreign currency and the associated decline in net worth through a weak balance sheet. Both views underline the role of financial constraints...

In this paper, we analyze the properties of nonparametric estimators of a regression function when some covariates are not directly observed, but have only been estimated by some nonparametric procedure. We provide general results that can be used to establish rates of consistency or asymptotic normality in numerous econometric applications, including nonparametric estimation of simultaneous eq...

We study an overlapping generations model of human capital accumulation with threshold effects using regional data for West Germany. Our basic goal is to shed light on what makes German regions grow. The paper finds that the relative income distribution appears to be stratifying into a trimodal distribution. Thus, application of the threshold model to a real world case, here West Germany, shows...

The paper analyzes the effects of a regionally coordinated profit tax in a model with three active countries, one of which is not part of the union, and a globally mobile firm. We show that regional tax coordination can lead to two types of welfare gains. First, for investments that would take place in the region in the absence of coordination, this measure can transfer location rents from the ...