median voters or budget maximizers evidence from school expenditure referenda some readers may have found these results of greater interest were we able to confirm the directional hypotheses of the certainty setter model in addition to finding that spending is related to the reversion the much weaker prediction of the uncertainty model yet the failure of the certainty when base elections were optional their infrequent occurrence might be expected under either a median voter or a setter model for those districts that did hold base elections the observations appear consistent with a setter model but are either inexplicable by or inconsistent with a median voter model finally both a the relationship between the number of budget elections and the presence of base elections and b the outcome of mandatory base elections in 1978 provide a set of observations that are challenging to either model a similar challenge was posed by our investigation of budget elections when we called attention to the inadequacy of static full information models rather than resolving the question of the simple setter model against the simple median voter model our results indicate that both may be inappropriate and that endeavors dealing with complexities omitted here are warranted

the role of pilot and demonstration plants in technology development and innovation policy pilot and demonstration plants pdps represent bridges between generating basic knowledge and technological breakthroughs on the one hand and industrial applications and commercial adoption on the other this paper reports on a longitudinal study of how two technological fields that received significant public funding evolved biochemical conversion of biomass and thermal conversion of black liquor in doing so this study makes two contributions first it provides a framework for analyzing the roles of various types of pdps in developing new technology the framework highlights the learning processes taking place at and around these plants and how they contribute to reducing different types of risks it also elaborates on the importance of actor networks and institutional preconditions and how both network performance and institutions can be influenced through various strategies second the article contributes with new insights into the challenges of innovation policy in a pdp context a policy mix is often required because policy cannot be considered meaningfully at a single level of government and will therefore be influenced heavily by limited foresight and politics both nationally and locally therefore policy must address both the need for parallel and iterative public funding of r d and different types of plants as well as attempts to directly influence collaborative processes in actor networks

silicon envy how global innovation clusters hurt or stimulate each other across developed and emerging markets the authors examine intercluster dynamics among rival global clusters on monthly counts of patents startups and new product commercializations between 1999 and 2014 while controlling for numerous exogenous variables results show that rival innovation clusters facilitate rather than hinder each other s growth due to resources complementarities reverse fertilization occurs from emerging to developed clusters contrary to the received wisdom this study is the first to show intercluster dynamics as important drivers of cluster growth to explain the counterintuitive findings the authors draw upon the coopetition view which suggests mutually beneficial growth across all rival clusters rather than zero sum gains

transforming the energy sector the evolution of technological systems in renewable energy technology this paper analyses the development and diffusion of technologies that utilize renewable energy sources in germany sweden and the netherlands the analysis enlarges the life cycle model of industry evolution to one where the focus is on the formation and evolution of new technological systems particular focus is on explaining success and failures in shifting from a formative phase into one characterized by positive feedbacks a set of challenges is identified for policy makers attempting to influence the process of transforming the energy sector

creating venture capital industries that co evolve with high tech insights from an extended industry life cycle perspective of the israeli experience this paper presents an industry life cycle model of venture capital vc and associated startup intensive high tech clusters based on the israeli experience of the last 35 years throughout vc is considered as a new industry which when successful traverses five phases background conditions pre emergence emergence restructuring and consolidation each phase comprises a number of events and processes including policy ones a central process is vc emergence a cumulative self reinforcing process involving a number of interrelated sub processes a central sub process in the israeli case was vc startup co evolution which was the critical link between the vc emergence and the transformation of the high tech cluster into a startup intensive configuration our analysis suggests that provided appropriate background conditions prevail vc could be central vector in the transformation of existing high tech clusters 2006 elsevier b v all rights reserved

new silicon valleys or a new species commoditization of knowledge work and the rise of knowledge services clusters this paper explores knowledge services clusters kscs as a distinct and increasingly important form of geographic cluster in particular in developing countries kscs are defined as geographic concentrations of lower cost skills serving global demand for increasingly commoditized knowledge services based on prior research on clusters and services offshoring and data from the offshoring research network orn major properties and contingencies of ksc growth are discussed and compared with both high tech clusters and low cost manufacturing clusters special emphasis is put on the ambivalent effect of commoditization of knowledge work on ksc growth it is proposed that kscs attract most client projects if service commoditization is medium whereas higher or lower commoditization either increases global competitive pressure or lowers demand and economies of scale and scope ksc attractiveness is further related to the perceived availability of skills at relatively low costs and cluster connectedness with client economies through corporate networks and professional communities findings not only advance current debates on clusters global services sourcing and the geography of knowledge production but also have important policy implications

the impact of the corporate income tax evidence from state organizational form data abstract by taxing the income of corporate firms at a different rate than non corporate firms taxes can play an important role in a firm s choice of organizational form the sensitivity of the organizational form decision to tax rates provides a key indicator of the distortion created by the corporate income tax this paper uses new cross sectional data on organizational form choices across states compiled in the census of retail trade to estimate this sensitivity the results document a significant impact of the relative taxation of corporate to personal income on the share of real economic activity that is done by corporations and that the impact is many times larger than has been found in the previous empirical literature based on time series data the results show little impact however on the actual operations of firms such as their labor intensity wages and the like they do indicate that firms are able to exploit the progressivity of the corporate income tax system by dividing into numerous firms

income shifting within a dual income tax system evidence from the finnish tax reform of 1993 dual income tax systems can suffer from income that shifts from progressively taxed labour income to capital income which is taxed at a lower flat rate this paper empirically examines the 1993 finnish dual income tax reform which radically reduced the marginal tax rates on capital income for some but not all taxpayers we measure how overall taxable income and the relative shares of capital income and labour income reacted to the reform we find that the reform led to a small positive impact on overall taxable income but part of the positive response was probably offset by income shifting among the self employed

regional disadvantage employee non compete agreements and brain drain abstract a growing body of research has documented the local impact of employee non compete agreements but their effect on interstate migration patterns remains unexplored exploiting an inadvertent policy reversal in michigan as a natural experiment we show that non compete agreements are responsible for a brain drain of knowledge workers out of states that enforce such contracts to states where they are not enforceable importantly this effect is felt most strongly on the margin of workers who are more collaborative and whose work is more impactful

toward obtaining a consistent estimate of the elasticity of taxable income using difference in differences abstract the elasticity of taxable income eti is a central parameter for tax policy debates this paper shows that mean reversion prevents most estimators employed in the literature from obtaining consistent estimates of the eti a new method is proposed that will resolve inconsistency due to mean reversion under testable assumptions regarding the degree of serial correlation in the error term using this procedure i estimate an eti of 0 858 which is about twice as large as the estimates found in the most frequently cited paper on this subject 13 the corresponding elasticity of broad income is 0 475

taxes organizational form and the deadweight loss of the corporate income tax abstract by changing the relative gain to incorporation corporate taxation can play an important role in a firm s choice of organizational form general equilibrium models have shown that substantial shifting of organizational form in response to tax rates implies a large deadweight loss of taxation this paper estimates the impact of taxes on organizational form using data from 1900 1939 the results indicate that the effect of taxes is significant but small a corporate rate increase of 0 10 raises the non corporate share of capital 0 002 0 03 the implied deadweight loss of the corporate income tax is around 5 10 of revenue

from mass production to flexible specialization the sectoral and geographical extent of contract work in us manufacturing 1963 1997 e ssletzbichler j 2003 from mass production to flexible specialization the sectoral and geographical extent of contract work in us manufacturing 1963 1997 reg studies 37 753 771 over the last two decades much work in economic geography focused on a fundamental reorganization of capitalist production summarized as shift from fordist mass production to flexible specialization complementing this shift to flexible forms of production is the revival of interest in marshallian industrial districts characterized by geographically localized and tightly linked networks of small firms many a claim was based on anecdotal evidence in selected industries and regions in order to strengthen the importance of these results it is necessary to provide comprehensive empirical evidence across a broad range of sectors and regions this paper traces the key developments in economic geography and examines empirically the extent of flexible specialization in us manufacturing more specifically the paper focuses on

are changes of organizational form costly income shifting and business entry responses to taxes abstract drawing on administrative panel data covering the full population of business owners in the uk i study the effects of differential tax liabilities across organizational forms on business entry and on income shifting i find that a 10 increase in savings from incorporation leads to a 1 7 increase in the number of new business owners however higher entrepreneurial entry is offset by income shifting increasing the hazard rate of incorporation of the existing self employed by up to 2 3 for a 10 increase in tax savings i show that despite large tax savings from incorporation exceeding 10 pp in some years a substantial proportion of business owners fail to incorporate suggesting that income shifting through incorporation is not the primary avoidance channel for the self employed

employment growth and inter industry job reallocation spatial patterns and relatedness abstractemployment growth and inter industry job reallocation spatial patterns and relatedness regional studies the nature of employment reallocation between industries is assessed using rich register data for the netherlands it is found that employment decline in some industries is countered in a communicating vessels fashion by employment growth in other industries which is primarily driven by the availability of released skilled labour these labour demand interactions are predominantly local and stronger between related industries in addition the inter industry labour reallocation has a distinct geographical character in which the location of employment creation depends primarily on the residential location of the released employees rather than on the location of the job destruction

industrial clusters knowledge integration and performance abstract scholars examining the phenomenon of industrial clusters have begun to regard them as social communities specializing in efficient knowledge creation and transfer in addition to neo classical arguments focusing on the advantages of localization we seek to contribute to this body of work by developing the argument that both the degree of knowledge integration between an industrial cluster s agents and the scope of their economic activities are key dimensions behind their economic performance we present a model that incorporates a hypothesized relationship between these three dimensions and argue that a formal test of this hypothesis constitutes a promising area of future empirical research in this field

the embodiment of knowledge universities as engines of growth as universities open themselves up to the marketplace for knowledge and ideas to a greater degree than in the past debates over university missions has been common how can universities match their third mission contribution to society with their main missions of education and curiosity driven basic research to achieve their full growth potential this will require a change in policy attention from targeting university patenting and faculty spin offs to taking a broader view on universities contribution to economic development including other pathways most notably collaborative modes and mobility of trained human capital from academe to industry

the corporation as a tax shelter evidence from recent israeli tax changes abstract shifting of income between the corporate and the personal income tax bases in response to tax incentives is the premise of the literature on taxation and organizational form empirical evidence of income shifting is however merely circumstantial using a unique panel of high frequency vat data from israel we trace the footprints of income shifting through incorporation by high income individuals who convert their labor income into less taxed dividends a rise in the personal income tax rates resulted in more than 4500 companies a 5 addition to the corporate sector being registered in the 12 months following the tax change mainly by self employed professionals in the industries of business activities and health services behavioral response to taxation was found only in the top percentile of the income distribution

securing access to lower cost talent globally the dynamics of active embedding and field structuration manning s sydow j and windeler a securing access to lower cost talent globally the dynamics of active embedding and field structuration regional studies this article examines how multinational corporations shape institutional conditions in emerging economies to secure access to high skilled yet lower cost science and engineering talent two in depth case studies of engineering offshoring projects of german automotive suppliers in romania and china illustrate how multinational corporations engage in active embedding by aligning local institutional conditions with global offshoring strategies and operational needs multinational corporations thereby contribute to the structuration of field relations and practices of sourcing knowledge intensive work from globally dispersed locations the findings stress the importance of institutional processes across geographic boundaries that regulate and are shaped by multinational corporation activities manning s sydow j and windeler a

theorizing path dependence a review of positive feedback mechanisms in technology markets regional clusters and organizations the concept of path dependence has often been criticized as vague and only narrowly applicable although we can find some very refined definitions of the concept we also find a wide range of empirical phenomena being described as path dependent we argue that more detailed accounts of the positive feedback mechanisms that form paths can take path dependence beyond this state of being overdetermined but under specified reviewing three well described cases of path dependent dynamics in technology markets regional clustering and organizations we define a core set of positive feedback mechanisms that constitute path dependence at different analysis levels and clarify the relationship between positive feedback and increasing returns we show that path dependent processes that is processes driven by positive feedback that veer toward rigidity or lock in can be but do not have to be found under many labels including structural inertia coevolution or institutional persistence we conclude that a precise definition of path dependence does not need to be at odds with the concept s widespread use in understanding organizational and industrial development processes copyright 2013 the author 2012 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

business owners and income shifting evidence from finland this study examines income shifting between tax bases among the owners of privately held businesses the dual income tax system in finland offers noticeable incentives for income shifting between wages and dividends for business owners the dividend tax reform of 2005 enables us to study how this particular form of tax avoidance reacts to an exogenous change in tax rates our results support highly active income shifting behavior we find that the income shifting effect is homogeneous across different owners and firms however we find that the size of the tax incentive affects the size of the response suggesting that costs related to income shifting are important

median voters political systems and public policies an empirical test this paper tests the median voter hypothesis that variations in policies across political systems are caused by variations in median voter preferences the context of the empirical analysis is the tax policies of three groups of sub national governments in england in three time periods the results of a median voter model of tax policy variation are compared to the results of a mean voter model in different party systems and different electoral systems the evidence provides little support for the median voter hypothesis

a median voter analysis of variations in the use of property taxes among local governments this paper explores the variations among local governments in the composition of tax revenues or more specifically in the relative use of property taxes using a median voter framework various hypotheses are developed concerning the factors that should influence the relative use of property taxes a cross sectional sample of central cities is employed to test the hypotheses the empirical results are consistent with the hypotheses

dividend taxes and income shifting this paper analyzes whether a dividend tax cut for owner managers of closely held corporations encourages income shifting income generation or both we use rich swedish administrative micro data from 2000 to 2011 comprising detailed firm and individual level information we find robust evidence of extensive income shifting across tax bases in response to the 2006 swedish dividend tax cut owner managers of closely held corporations reclassify earned income as dividend income but do not increase total income the response is more pronounced for owner managers with tax incentives and with easier access to income shifting through a high ownership share

taxes financial decisions and organizational form evidence from publicly traded partnerships abstract publicly traded partnerships ptps also known as master limited partnerships are similar to u s corporations yet they are not subject to corporate taxes given their mixture of corporate and partnership characteristics ptps provide an experiment for studying taxation and firm financial decisions this paper compares the financial structure and dividend policies of ptps and corporations in the oil and gas exploration industry the results are consistent with hypotheses about taxes and financial decisions controlling for other factors ptps pay more dividends and borrow less than similar corporations

the choice of organizational form by closely held firms in sweden tax versus non tax determinants this article makes use of individual data from 2004 to 2008 on owners of closely held businesses in sweden to estimate the role of both tax and non tax determinants in the choice to be a closely held corporation chc versus a proprietorship although lower income individuals face relatively neutral incentives higher income households face strong tax incentives to be corporate the data suggest a strong response to these tax incentives many conventional non tax determinants are confirmed in the data as well copyright 2013 the author 2013 published by oxford university press on behalf of associazione icc oxford university press

the role of alliances in the early development of high growth firms rapid growth is sought after but may overstretch a firm s resources can alliances supply compensating support for rapidly growing firms longitudinal data on firms in a technology cluster are used to investigate rapid growth in relation to alliances and other factors known to be associated with firm growth rapid firm growth appears beneficial in terms of higher survival rates and earlier attainment of mid size but is rarely sustained alliances are predictors of rapid growth as are international operations venture capital is not directly associated with firm growth in the findings but there is a high incidence of alliances among venture capital backed firms copyright 2014 the author 2013 published by oxford university press on behalf of associazione icc all rights reserved oxford university press

the elasticity of taxable income evidence and implications abstract a central tax policy parameter that has recently received much attention but about which there is substantial uncertainty is the overall elasticity of taxable income we provide new estimates of this elasticity which address identification problems with previous work by exploiting a long panel of tax returns to study a series of tax reforms throughout the 1980s this identification strategy also allows us to provide new evidence on both the income effects of tax changes on taxable income and on variation in the elasticity of taxable income by income group we find that the overall elasticity of taxable income is approximately 0 4 the elasticity of real income not including tax preferences is much lower we estimate small income effects of tax changes on reported income implying that the compensated and uncompensated elasticities of taxable income are very similar we estimate that this overall elasticity is primarily due to a very elastic response of taxable income for taxpayers who have incomes above 100 000 per year who have an elasticity of 0 57 while for those with incomes below 100 000 per year the elasticity is less than one third as large moreover high income taxpayers who itemize are particularly responsive to taxation our estimates suggest that optimal tax structures may feature tightly targeted transfers to lower income taxpayers and a flat or even declining marginal rate structure for middle and high income taxpayers