the environmental kuznets curve environmental protection policy and income distribution abstract the effect of economic growth on pollution emissions differs substantially among high income countries i address this issue by analyzing public environmental policy decisions individual heterogeneity relative income effect and the political framework in which policy decisions are taken determine the emergence of the downward sloping segment of the environmental kuznets curve ekc income inequality produces a gap between the country s ability to pay for environmental protection and a country s willingness to pay i test this result by using oecd data on public r d expenditure for environmental protection the conclusion is that contrary to the ek hypothesis moments of the income distribution function other than the mean may be important for the emergence of a virtuous path of sustainable growth in high income countries

on the robustness of robustness checks of the environmental kuznets curve hypothesis since its first inception in the debate on the relationship between environment and growth in 1992 the environmental kuznets curve hypothesis ekc hereafter has been subject of continuous and intense scrutiny the most recent line of investigation criticizes the ekc hypothesis on more fundamental grounds in that it stresses the lack of sufficient statistical testing of the empirical relationship and questions the very existence of the notion of ekc attention is in particular drawn on the stationarity properties of the series involved per capita emissions or concentrations and per capita gdp and in case of presence of unit roots on the cointegration property that must be present for the ekc to be a well defined concept only at that point can the researcher ask whether the long run relationship exhibits an inverted u pattern on the basis of panel integration and cointegration tests for sulfur stern 2004 and perman and stern 1999 2003 have presented evidence and forcefully stated that the ekc hypothesis does not exist in this paper we ask whether similar strong conclusions can be arrived at when carrying out tests of system fractional integration and cointegration as an example we use the controversial case of carbon dioxide emissions the results show that more ekcs come back into life relative to traditional integration cointegration tests however we confirm that the ekc hypothesis remains a fragile concept

tax competition in federations and the welfare consequences of decentralization abstract this paper explores the impact of intensified tax competition within federal systems characterized by the presence of both horizontal tax externalities between the states and vertical tax externalities between states and federal government it shows that although these push tax rates in opposite directions horizontal towards state taxes that are too low vertical towards state taxes that are too high leaving the net outcome unclear intensified tax competition always worsens their combined effect that is intensified lower level tax competition in the form of an increase in the number of lower level jurisdictions is sure to reduce welfare but this is not because as usually supposed it makes excessively low state taxes even lower rather it is welfare reducing either for that reason or because it makes excessively high state taxes even higher

factors determining the location decisions of spanish mnes an analysis based on the investment development path on the basis of theoretical assumptions approached via the investment development path idp this study examines the most important factors for and against the location decisions in foreign direct investment taken by multinational enterprises considering host countries at very different stages of economic development latin american and european union countries we carry out different kinds of analysis on a sample of 103 firms belonging to a medium sized country that has recently achieved the status of developed country the results reveal that the importance that home country firm managers give to diverse location factors depends to a certain extent on the stage that each group of host countries has reached in the idp in line with prior research we find that firm managers consider mainly the group of factors associated with strategic asset seeking when deciding to locate their investments in the group of more developed countries european union in contrast our results show that when these firm managers choose the group of less developed countries latin america social and cultural factors play a more determinant role thus suggesting the importance of historical and cultural ties between the home and host countries

determinants of u s direct investment in the e e c revisited abstract this paper expands upon an earlier work in this review concerning the specification of a model to identify the determinants of u s direct foreign investment dfi in the e e c compared to earlier studies a longer data series is used an improved tariff discrimination proxy is employed and predicted sales are estimated and used as the output variable in the empirical work a variable to capture the effect of the u s capital control programs is also included the findings reaffirm the importance of market size especially in the plant and equipment equations as being an important determinant of dfi strong support was also found for the growth hypothesis consistent statistical support was found for the tariff discrimination hypothesis in addition the findings imply that a variable to capture the effects of fluctuating exchange rates should be included in future studies

growth and environmental quality testing the double convergence hypothesis abstract this paper discusses the double convergence hypothesis dch that the uncritical analysis of the so called environmental kuznets curve ekc implicitly implies according to the ekc empirical evidence would support the hypothesis that economic growth through a deterministic sequence of phases would produce cross country convergence in per capita output and as a by product convergence in the demand for environmental quality however factual analysis seems to reject the general hypothesis of convergence in per capita output limiting the validity of such an assessment to the case of homogeneous groups of countries this is why to test the dch the paper focuses on the original group of oecd countries for which the economic convergence turned out to be true this allows us to verify whether green and convergence follows as a consequence of economic convergence the paper also tests for a more equitable distribution of protection policies among countries unlike other studies which do not make the dch explicit and have focused on pollutant emissions this research explicitly tests for the double convergence using as a proxy for the demand for environmental quality the territory set aside for protected areas the results confirm that for the selected homogenous group of countries growth has accompanied the demand for environmental quality this happens both in terms of conditional and stochastic convergence

intergovernmental transfers and fiscal behavior insurance versus aggregate discipline abstract this paper evaluates the trade off between the advantages of risk sharing and the perils of common pool problems in federal fiscal arrangements under the assumption of asymmetric information we evaluate two alternative regimes of intergovernmental transfers in one regime the central government pre commits to a certain level of transfers that compensate vertical fiscal imbalances and provide some limited ex ante insurance in the other regime it accommodates ex post the fiscal needs of the different provinces in this second case full insurance results but the economy is subject to a tragedy of the fiscal commons with excessive subnational spending insufficient local taxation and reduced production of federal public goods we find the range of parameters for which one or the other institutional regime will be preferable the result is a fiscal federalism version of the usual trade off between rules and discretion

status effects and environmental externalities abstract this paper examines a static competitive economy where the production of a consumption good generates pollution that adversely affects human welfare preferences are defined over consumption leisure pollution and economic status each person s status increases with her own consumption but decreases with the average consumption of society the achievement of a pareto efficient resource allocation requires a consumption tax to offset the incentive to overconsume in the pursuit of enhanced status in contrast with standard prescriptions the efficient pollution tax generally exceeds the sum of individuals marginal willingness to pay for pollution abatement these findings remain unaltered when preferences are modified to incorporate altruistic concern for others well being altruism however suggests a potential role for government intervention to achieve a desirable i e pareto efficient distribution of welfare between individuals

the locational determinants of direct investments among industrialized countries abstract market size and growth rate as well as tariff barriers have already been shown to influence u s direct investments in the eec the present paper enlarges the field of observation to all bilateral flows of direct investments among six industrialized countries the united states germany france the united kingdom the netherlands and belgium over the years 1969 1982 it also tests the impact of two other would be locational determinants of foreign direct investments namely unit labour costs and export flows moreover a new and alternative specification is put forward and tested which assumes that in the investment decision process foreign locations are in competition not only with each other but also with the home country of the investor

relative wealth status seeking and catching up abstract according to our studies if relative wealth appears in the reduced form utility function for example because of status seeking then the poor will catch up with the rich if the elasticity of marginal utility of relative wealth is greater than the elasticity of marginal utility of consumption we give sufficient conditions for the final distribution of wealth to be independent of the initial distribution and conditions for saddlepoint stability in a two class model

interdependent preferences an econometric analysis the theoretical model of gaertner 1974 and pollak 1976 for the interdependence of preferences in the linear expenditure system is estimated for a cross section of households the interdependence of consumption of different households has implications for the stochastic structure of the model and for the identifiability of its parameters both aspects are dealt with the empirical results indicate a significant role played by the interdependence of preferences one of its implications is that predictions of the effects of changes in a household s exogenous variables differ according to whether the exogenous variable only changes for this household or for all households jointly c 1997 john wiley sons ltd

alternative models of individual behaviour and implications for environmental policy abstract most insights of environmental economics are in line with the standard neoclassical economic model of rational behaviour formulated in terms of maximization of utility in general or of profits in particular the standard theory of environmental policy is a case in point however the maximization hypothesis and its methodological foundation have been criticized on many grounds related to a lack of either logical or empirical content moreover over the years a great many alternative models of behaviour have been proposed both criticism and alternatives are surveyed here attention is devoted to relevant insights from the philosophy of science the notion of methodological individualism and other criticism the alternative behavioural models include bounded rationality and satisficing lexicographic preferences habitual behaviour incommensurability and multicriteria evaluation and various models of behaviour under uncertainty major implications of the criticism and alternative models of individual behaviour for environmental policy theory are outlined

status the distribution of wealth and growth we analyze a simple model of endogenous growth in which individuals care about both consumption and their rank in the distribution of wealth we show that the steady growth rate of the economy increases with both the strength of the status seeking motive and the initial equality of the wealth distribution contrary to the basic model of endogenous growth the equilibrium growth rate is not necessarily smaller than in the social optimum and we identify the circumstances under which the two coincide

internationalization of business services an interregional analysis o farrell p n wood p a and zheng j 1996 internationalization of business services an interregional analysis reg studies 30 101 118 internationalization behaviour by business service firms in scotland and the south east of england is analysed evidence is outlined on level of internationalization time profile of entry into foreign markets location of foreign markets mode of entry into first and largest foreign markets and behavioural aspects of international market selection and entry mode choice initial foreign market entries occurred in the early 1960s with south east business service organizations entering foreign markets earlier while there was a surge in internationalization by scottish businesses after 1988 few firms engaged in a process of explicitly choosing a foreign market to enter since the most common entry mechanism was responding to a particular ad hoc order similarly almost 70 of firms made the mode choice decision without considering any alternative modes o farrell p

status seeking and material affluence evaluating the hirsch hypothesis abstract when individuals hold a preference for high relative consumption competition to achieve social status can lead to inefficiently high levels of production and consumption contributing to natural resource depletion and environmental degradation in the 1970s fred hirsch argued that an increasing portion of expenditure is allocated to status seeking as average income rises this paper critiques this hypothesis from two points of view first we note examples from the historical and anthropological literatures suggesting that status seeking is often important in societies with relatively low incomes second we consider a set of analytical models that focus on the economic consequences of status seeking when social status is defined in terms of the algebraic difference between an individual s consumption of a status good and the average consumption level in society hirsch s hypothesis holds true and growth in the level of productivity and output can lead to declines in human welfare if on the other hand status is linked to the ratio of individual and average consumption hirsch s hypothesis is valid only if social status and non status goods are poor substitutes the paper also considers two cases in which social status is defined in terms of the amount of time people devote to status oriented activities under this assumption productivity growth leaves time use unchanged though the value of time devoted to status signaling increases in proportion to total expenditure

the decision to establish a foreign bank branch or subsidiary an application of binary classification procedures this paper has two purposes first we model a key decision for inter national banks using data on the foreign direct investment fdi behavior of foreign banks in japan and california second we examine the utility of linear discriminant analysis and maximum likelihood logit analysis as statistical techniques for relating a qualitative dependent variable to a vector of inde pendent variables we apply these techniques to the decision by parent banks as to whether or not to have a subsidiary branch in california japan we treat the deci sion as a binary choice based on a consideration of various relevant factors the population for each of the countries consists of those foreign to the host country banks that already have a presence in the country the research ques tion then becomes given that a foreign bank is in the country does the extent of the parent bank s experience internationally and in the host country affect the probability that it will deepen its presence the choice of statis tical tools by which to examine this question gives rise to our methodological concerns

the incentive effect of fiscal equalization transfers on tax policy abstract a theoretical analysis considers the impact of a typical system of redistributive fiscal equalization transfers on the tax effort of local jurisdictions more specifically it shows that the marginal contribution rate i e the rate at which an increase in the tax base reduces those transfers might be positively associated with the local tax rate while the volume of grants received is likely to be inversely related to the tax rate these predictions are tested in an empirical analysis of the tax policy of german municipalities in order to identify the incentive effect the analysis exploits discontinuities in the rules of the fiscal equalization system as well as policy changes the empirical results support the existence of an incentive effect suggesting that the high marginal contribution rates induce the municipalities to set significantly higher business tax rates compared with a situation without fiscal equalization

opportunistic and partisan election cycles in brazil new evidence at the municipal level this article tests the hypothesis of opportunistic and partisan cycle models using a new large data set of brazilian municipalities over the 1989 2005 period the results show an increase in total and current expenditures and a decrease in municipal investments local tax revenues and budget surplus in election years they also show that partisan ideology exerts a relative influence on the performance of the local public accounts these results confirm that both opportunistic and partisan cycles have occurred in the management of the budgets of brazilian municipalities after the end of the military government

politico economic equilibrium and economic growth abstract we propose a notion of dynamic politico economic equilibrium which builds on two key assumptions policies are determined sequentially and agents are fully rational in their roles as both consumers and voters we examine a simple model of endogenous growth and infinitely lived agents where taxes on income are endogenous and where growth critically depends on the initial distribution of asset holdings we relate our equilibrium definition and results to existing literature on time consistency and on political economy and growth we show that our equilibria are time consistent and we argue that the choice of equilibrium concept might have important quantitative implications

an organizational model for understanding internationalization processes we propose an organizational model for understanding internationalization processes we argue that these processes differ with the type of organization we compare the internationalization processes of three organization types the mass production organization the disaggregated production organization and the project based organization each organization type responds differently to critical elements of the internationalization process namely the focus of entry the degree of presence and physical presence requirements in the foreign market which in turn influence what modal forms are adopted as the process progresses consequently we observe different approaches to resource commitment in the foreign market over time

estate taxes consumption externalities and altruism we study how the introduction of consumption externalities affects the efficiency of the dynamic equilibrium in an economy displaying dynastic altruism when the bequest motive is inoperative consumption externalities affect the intertemporal margin between young and old consumption and thus modify the intertemporal path of consumption and capital the optimal tax policy that solves this intertemporal inefficiency consists of a tax on capital income and a pay as yougo social security system the later solves the overaccumulation of capital due to the inoperativeness of the bequest motive and the former solves the inefficient allocation of consumption due to consumption externalities when the bequest motive is operative consumption externalities only cause an intratemporal inefficiency that affects the allocation of consumption between the generations living in the same period but do not affect the optimality of the capital stock level this suboptimal allocation of consumption implies in turn that the path of bequest is also suboptimal the optimal tax policy in this case consists of an estate tax and a capital income tax the estate tax corrects the intratemporal inefficiency but generates an intertemporal inefficiency which is corrected by means of an appropriate capital income tax

using a discontinuous grant rule to identify the effect of grants on local taxes and spending when investigating the effects of federal grants on the behavior of lower level governments it is hard to defend the handling of grants as an exogenous factor federal governments often set grants based on characteristics and performance of decentralized governments in this paper we make use of a discontinuity in the swedish grant system in order to estimate the causal effects of general intergovernmental grants on local spending and local tax rates the formula for the distribution of funds is used as an exclusion restriction in an iv estimation we find evidence of crowding in where federal grants are shifted to more local spending but not to reduced local tax rates

some evidence on the effect of the separation of spending and taxing decisions it is often argued that separation of public spending and taxing decisions engenders in the voter overoptimistic hopes that someone else will bear the cost of public services thereby inducing an increase in the size of government but are perceived tax prices systematically and persistently reduced by separation although in stock markets all agents expectations may be unbiased they may or may not be unbiased in political markets this paper analyzes the separation created in federal states when the central government finances local expenditures evidence from a dynamic decisive voter model is presented that indicates that the separation introduced by federal grants to canadian provinces did in fact reduce the perceived tax price of provincial public services and raise provincial expenditures the results suggest also that the effect of separation diminished over time

inequality as a cause of environmental degradation abstract this paper advances two hypotheses first the extent of an environmentally degrading economic activity is a function of the balance of power between the winners who derive net benefits from the activity and the losers who bear net costs second greater inequalities of power and wealth lead all else equal to more environmental degradation

does federalism lead to excessively high taxes the relative strengths of vertical and horizontal tax externalities turn on the balance between the interest responsiveness of the supply of savings and demand for capital the extent to which immobile factors are taxed by the states and the strength of preferences between federal and state expenditures the vertical externality will dominate if the aggregate tax base of the federation is responsible to the state tax instrument tax interactions in federations are more complex than has often been supposed

economic growth and environmental degradation the environmental kuznets curve and sustainable development abstract in this paper we critically examine the concept of the environmental kuznets curve ekc it proposes that there is an inverted u shape relation between environmental degradation and income per capita so that eventually growth reduces the environmental impact of economic activity the concept is dependent on a model of the economy in which there is no feedback from the quality of the environment to production possibilities and in which trade has a neutral effect on environmental degradation the actual violation of these assumptions gives rise to fundamental problems in estimating the parameters of an ekc the paper identifies other econometric problems with estimates of the ekc and reviews a number of empirical studies the inference from some such ekc estimates that further development will reduce environmental degradation is dependent on the assumption that world per capita income is normally distributed when in fact median income is far below mean income we carry out simulations combining ekc estimates from the literature with world bank forecasts for economic growth for individual countries aggregating over countries to derive the global impact within the horizon of the bank s forecast 2025 global emissions of so 2 continue to increase forest loss stabilizes before the end of the period but tropical deforestation continues at a constant rate throughout the period

welfare maximizing vs growth maximizing shares of government investment and consumption abstract this paper examines the relationship between economic growth and the investment and consumption components of government spending by modifying a specification of barro s journal of political economics 1990 98 s103 s125 model to prevent asymmetry in the production process the predictions are consistent with existing empirical findings

the environmental kuznets curve for pm2 5 pollution in beijing tianjin hebei region of china a spatial panel data approach abstract the purpose of this study is to exam the existence of environmental kuznets curve ekc of pm2 5 pollution in the beijing tianjin hebei bth region of china as one of the most important economic growth poles in china bth region has long been suffering from air pollution especially pm2 5 pollution thus in this study we utilized satellite observations of pm2 5 pollution and panel data of 13 cities in bth region from 1998 to 2016 to investigate the relationship between economic growth and pm2 5 pollution after verifying the spatial effect of pm2 5 pollution by spatial statistical analysis the spatial econometric model spatial durbin model sdm was chosen over the non spatial model in the examination of ekc the results showed that 1 the relationship between economic growth and pm2 5 pollution presented a significant inverted u shaped pattern though bth region is still in the upward section there is a hope that it will cross the point and enter the downward section in the future 2 the turning points of ekc would happen later with spatial effect considered compared to the result of non spatial model 3 the turning point of ekc would not happen until the region enter the post industrial economy stage moreover though some of the cities in bth region have entered post industrial stage none of them has cross the turning point of ekc results of this study indicate a promising future in the control of pm2 5 pollution as well as provide suggestions to put more emphasis on regional cooperative governance in air pollution control for the policy makers

social status education and growth this paper investigates the implications of social rewards on the allocation of talent in society and consequently on the process of economic growth we consider two sources of heterogeneity among workers nonwage income and innate ability a greater emphasis on status may induce the wrong individuals that is those with low ability and high wealth to acquire schooling causing workers with high ability and low wealth to leave the growth enhancing industries this crowding out effect taken alone discourages growth growth may be enhanced by a more egalitarian distribution of wealth which reduces the demand for status

trends in foreign direct investment flows a theoretical and empirical analysis this paper seeks to provide a rationale for changing trends in the flow and determinants of foreign direct investment fdi as a result of macro economic and firm strategy considerations we identify several factors that impact on such trends and develop propositions that could explain the phenomenon generically the study then provides preliminary empirical support for the propositions presented and outlines the path for further research needed to investigate more causal links the statistical analysis of investments by us multinational enterprises mnes reveals significant changes in the regional distribution of fdi and a change in some of its traditional determinants results show that us mnes are now making increasing investments into asia to exploit low wage levels and to secure entry into new markets

the role of location related factors in u s banking involvement abroad an empirical examination this study examines the role of major location specific advantages in the international branch banking involvement of u s banks using pooled time series 1976 82 cross sectional thirty countries regression analysis this study finds that the u s business presence in foreign country has a strong positive effect on u s branch banking activity in that country in contrast the local market opportunity appears to have no significant effect these results hold for the entire set of countries as well as each of five subsets developed less developed european latin american and asian countries the openness of the host country to the establishment of new foreign bank branches does affect u s branch banking involvement this effect is most pronounced in the less developed countries particularly those in asia

the determinants of foreign direct investment in services this paper has two main objectives first to consider country specific determinants that attract services fdi and second to compare the importance of these determinants vis a vis traditional determinants that attract manufacturing fdi using oecd countries as our sample and 1980 to 2003 as our time period we consider the determinants of inward fdi in a panel setting our results provide empirical evidence to support the view that no new theories may be necessary to explain the determinants of services fdi

intra generational equity and sustainable welfare a time series analysis for the uk and sweden this paper discusses the importance of intra generational equity to sustainable development it outlines a number of methodologies for measuring income inequality in the economy and presents several possible ways of incorporating the impact of distributional effects into measures of welfare in the economy the authors highlight in particular an index developed by atkinson atkinson a b 1970 distributive politics and economic growth q j econ may 465 490 based on the social welfare model this method possesses two main advantages over other methods firstly it is expressed directly in terms of social well being secondly value judgements incorporated into the measure are made explicit through the parameter o which expresses society s degree of aversion to income inequality the paper calculates the value of the atkinson index for two case study countries sweden and the uk between 1950 and 1996 for a central estimate of o0 8 the results show that the welfare loss due to inequalities in the distribution of income varied between 5 and 10 for sweden and between 6 and 14 for the uk with the higher values coming towards the end of the period the paper explores the sensitivity of these results to changes in the value of o for the case of the uk and discusses the relevance of the work to the measurement of sustainable welfare 2000 elsevier science b v all rights reserved

fiscal policy and reelection in brazilian municipalities this paper uses a new panel of more than 2 000 brazilian municipalities over 13 years to analyze the influence of public expenditures on the probability of mayors reelec tion we examine brazilian municipal elections from 1988 to 2000 using a logit fixed effects model the results suggest that mayors who spend more during their terms of office increase the probability of their own reelection or of a successor of the same political party in par ticular higher capital spending over the years preceding elections and current expenditures in election years are beneficial to brazilian incumbent mayors

the effect of national culture on the choice of entry mode characteristics of national cultures have frequently been claimed to influence the selection of entry modes this article investigates this claim by developing a theoretical argument for why culture should influence the choice of entry two hypotheses are derived which relate culture to entry mode choice one focusing on the cultural distance between countries the other on attitudes towards uncertainty avoidance using a multinomial logit model and controlling for other effects the hypotheses are tested by analysing data on 228 entries into the united states market by acquisition wholly owned greenfield and joint venture empirical support for the effect of national culture on entry choice is found

location specificity and the transferability of downstream assets to foreign subsidiaries we investigate the effect of firm specific advantages being local in scope and the influence of subsequent location specific disadvantages on the choice of foreign entry mode and subsidiary performance to look into this issue we examine japanese fdi data from the wholesale and retail industries two sectors that have productive activity concentrated in downstream processes and location bound resources our theoretical and empirical analyses demonstrate that in situations where required capabilities must be developed through local experience and where location specific resources were subject to market failure acquisition and joint venture strategies were preferred greenfield entries were successful in industries that permitted the offsetting of location specific disadvantages with firm specific advantages from our results we draw implications for the entry mode literature and offer a perspective on the performance of the entry mode choice

the standard error of regressions statistical significance as used in economics has weak theoretical justification in particular it merges statistical and substantive significance the 182 papers using regression analysis in the american economic review in the 1980s were tested against 19 criteria for the accepted use of statistical significance most some three quarters of the papers did poorly likewise textbooks in econometrics do not distinguish statistical and economic significance statistical significance should not be the focus of empirical economics

mimetic and experiential effects in international marketing alliance formations of us pharmaceuticals firms an event history analysis alliances are recognized as an indispensable tool for managers operating in a global business environment and as a fundamental stage of the internationalization process of the firm drawing on a co evolutionary framework this article investigates the mimetic and experiential effects in international alliance formation we focus on a critical unresolved issue in the literature what is the role of mimetic behavior and previous alliance experience in mitigating the uncertainty associated with engaging in cross border operations an event history analysis of 792 international marketing alliance formations initiated by 317 firms in the us pharmaceutical industry is employed to test the hypotheses the findings of two different hazard rate models reveal significant complex effects of density and cross border alliance experience on the propensity to engage in new international marketing alliances

tax effort and oil royalties in the brazilian municipalities abstract this paper estimates a stochastic production frontier to investigate whether municipalities covered by oil royalties in the last decade have reduced their tax effort in brazil the issue is relevant to the prospect of a substantial increase in these revenues and the new rules for distribution of the funds established by law no 12 734 2012 the inputs were provided by personnel and capital expenditures whereas the product was defined as the municipal tax collection with the purpose of overcoming the endogeneity problems due to reverse causality of output on inputs we used the lagged independent variable as instruments in the inefficiency equation the data set is composed of a panel of brazilian municipalities from 2002 to 2011 the results indicate that oil revenues have a negative impact on the estimated efficiencies signaling reduced fiscal effort by the benefiting municipalities

grazing the commons an empirical analysis of externalities subsidies and sustainability abstract an empirical means of measuring externalities in the fifty states of the us is presented and the relationship between externalities subsidies and sustainability is investigated firms seeking to maximize profits create externalities thus securing implicit internal subsidies the subsidies are generally supported by those less well off and the socioeconomic energy and environmental indicators of the public sector worsen as externalities and subsidies increase implicit subsidies due to externalities in pollution control energy consumption and taxes are quantified the amount of subsidy is calculated by state and statistically compared to socioeconomic energy environmental and economic variables poverty unemployment and income disparity are found to increase significantly while income economic development attractiveness energy efficiency and environmental quality decline with increasing externalization across states an empirical method of operationalizing sustainability is presented and the relationship of sustainability to subsidies is investigated and found to be significant and negative recommendations are presented for minimizing the effects of externalities

causal relationship between energy consumption and gdp growth revisited a dynamic panel data approach abstract this paper uses the panel data of energy consumption and gdp for 82 countries from 1972 to 2002 based on the income levels defined by the world bank the data are divided into four categories low income group lower middle income group upper middle income group and high income group we employ the gmm sys approach for the estimation of the panel var model in each of the four groups afterwards the causal relationship between energy consumption and economic growth is tested and ascertained we discover a in the low income group there exists no causal relationship between energy consumption and economic growth b in the middle income groups lower and upper middle income groups economic growth leads energy consumption positively c in the high income group countries economic growth leads energy consumption negatively after further in depth analysis of energy related data the results indicate that in the high income group there is a great environmental improvement as a result of more efficient energy use and reduction in the release of co2 however in the upper middle income group countries after the energy crisis the energy efficiency declines and the release of co2 rises since there is no evidence indicating that energy consumption leads economic growth in any of the four income groups a stronger energy conservation policy should be pursued in all countries

information access income distribution and the environmental kuznets curve abstract recent empirical studies have tested the hypothesis of an environmental kuznets curve ekc focusing primarily on the relationship between per capita income and certain types of pollutant emissions given the stock nature of many pollution problems emissions only partially account for the environmental impacts moreover almost all of the studies have given consideration to little more than income levels as explanatory variables this paper empirically tests the hypothesis of the ekc existence for a stock sensitive indicator that is the percentage of protected area pa within national territory it does theorize that economic growth is a necessary condition in order to better address environmental issues but it also stresses that other variables income distribution education information accessibility may play a fundamental role in determining environmental quality contrary to other studies that mainly focus on the calculation of the income level corresponding to the transition point this paper is more concerned with the calculation of environmental quality corresponding to that transition point that is the minimum level of environmental quality that a country is willing to accept this paper highlights the idea that if the transition point is determined primarily by income level social policies determine the level of environmental quality corresponding to that point

internalization and experience japanese banks international expansion 1980 1998 we use an interdisciplinary approach to investigate multinational banks foreign activities we bridge core concepts from the stages theory of internationalization to internalization theory to extend the literature on the defensive expansion hypothesis unlike the primarily aggregate levels of analysis employed in previous research on multinational banking we utilize a firm level analysis of the internationalization experiences of 21 japanese banks in the period 1980 1998 we find that banks undertake foreign direct investment to secure internalization benefits by following their existing clients and to achieve economies of scale in the application of their intangible assets in international markets the magnitude of these relationships however is contingent upon the level of a bank s experience in the host countries consistent with predictions from internationalization theory we find that the motivations for international expansion can change over time

raising taxes through equalization a simple theory suggests that a common form of federal horizontal equalization grants should cause subnational governments to levy higher tax rates distorting local tax bases and so increasing federal transfers to test this i examine canadian provincial tax policies in the 1972 2002 period consistent with the theory provinces respond to expansions of equalization transfers by increasing their own tax rates i estimate that on average tax rates in grant receiving provinces were substantially and significantly higher as a consequence of the transfer formula jel classification h21 une theorie simple suggere qu une forme usuelle d octrois federaux de perequation horizontale devrait entrainer les gouvernements sub nationaux a imposer de plus hauts taux d imposition modifiant ainsi les bases de fiscalite locale et ce faisant accroissant les transferts federaux pour mettre au test cette hypothese on examine les politiques fiscales des provinces canadiennes pour la periode entre 1972 et 2002 d une maniere qui semble supporter l hypothese les provinces ont repondu a un accroissement des transferts de perequation en accroissant leur propre taux d imposition on estime que les taux moyens d imposition dans les provinces qui recoivent des transferts sont plus eleves de maniere substantielle et significative en raison de la formule de transferts

taxation and deadweight loss in a system of intergovernmental transfers intergovernmental transfer programs in many federal systems including canada attempt to equalize differences in subnational jurisdictions tax capacities on the basis of the so called representative tax system rts it is shown that rts equalization grants effectively compensate subnational governments for a portion of the deadweight loss associated with taxes and consequently the grants may tend to increase the distortionary tax rates chosen by subnational governments this may be the case even when equalization is confined to tax bases that themselves are nondistortionary such as the taxation of pure economic rents

multinational corporation internationalization in the service sector a study of japanese trading companies this paper extends chang s 1995 sequential investment theory to include multinational corporations mncs in service industries given this sector s large and growing impact on the global economy to facilitate an examination of service mnc internationalization patterns we develop a new typology of service investment i e core global related local unrelated global and unrelated local based on business relatedness and location specificity we test this typology on a sample of large japanese trading companies our results suggest that the initial investments of service mncs are closely related to their core businesses and are less location specific but that subsequent investments are less related to firms core services and are more location specific a pattern similar to the traditional view on manufacturing mncs we extend our analysis to examine several case studies to provide a richer context for these findings in addition we examine the performance implications of internationalization our findings suggest that firms that internationalize through early investments that are closely related to their core activities outperform those in unrelated businesses over time but that this performance gap between related and unrelated foreign investments diminishes in more advanced stages of internationalization

an evaluation of the investment environment in international logistics zones a taiwanese manufacturer s perspective abstract with the rapid development of international logistics the role of international logistics zones has become increasingly important this study evaluated the importance of investment environment factors namely political infrastructure cost and market factors for firms intention to invest in international logistics zones a structural equation modeling sem approach was employed to analyze respondents foreign direct investment fdi intention results indicated that market cost and infrastructure factors have a positive effect on firms intention to invest in international logistics zones the influence of political factor on firms investment intention was not supported in this study theoretical and practical implications of the findings for firms foreign direct investment in international logistics zones are discussed

fiscal illusion and the grantor government empirical studies indicate that unconditional intergovernmental grants have a flypaper effect several authors have modeled recipient government spending under fiscal illusion to explain this phenomenon in short grants reduce the perceived marginal cost of recipient government output this paper develops a more general model of illusion that incorporates the grantor government thereby eliminating inconsistencies encountered in previous models the more general model implies that grant finance increases the perceived marginal cost of grantor government output thus grant induced illusion should have two effects an increase in recipient output and a decrease in grantor output the empirical work supports this hypothesis

the effect of cultural distance on entry mode choice international diversification and mne performance a meta analysis although a growing literature indicates that cultural distance that is differences between national cultures is an important determinant of organizational actions and performance both empirical and theoretical concerns abound in this study the relationships of cultural distance with entry mode choice international diversification and mne performance are examined by meta analyzing data from 66 independent samples with cumulative sample sizes ranging from 2 255 to 24 152 regression results failed to provide statistical evidence of significant relationships between cultural distance and entry mode choice international diversification and mne performance the examination of moderator effects however yielded important results we found a strong negative association between cultural distance and entry mode choice for us based mnes the cultural distance international diversification relationship was negative for high technology industries while it was positive for other industries cultural distance also had a strong positive effect on mne performance for developed country investments a similar strong positive relationship was found between cultural distance and international diversification in studies with more recent samples results of this study indicate that substantial additional research is needed before the role of cultural distance is fully understood

pollution intensity of gdp and trade policy can the world bank be wrong abstract what are the environmental implications of open trade policies in developing countries economic theory and environmental critics suggest they worsen environmental quality this conventional wisdom has been challenged by several studies which suggest that outward oriented trade policies are likely to be win win enhance economic growth and environmental quality this paper challenges revised conventional wisdom rcw by demonstrating that developing countries with outward oriented trade policies have higher pollution intensities of gdp than those following inward oriented policies the paper examines why the evidence reported here differs so sharply from rcw studies considers the policy implications of these results and identifies reasons why despite them it may not make sense to totally discount future potential win win opportunities

environmental degradation in france the effects of fdi financial development and energy innovations abstract this paper explores the determinants of carbon emissions in france by accounting for the significant role played by foreign direct investment fdi financial development economic growth energy consumption and energy research innovations in influencing co 2 emissions function in this endeavour we employ the novel sor shahbaz et al 2017 unit root test on french time series data over the period 1955 2016 to examine the order of integration in the presence of sharp and smooth structural breaks in the variables we also apply the bootstrapping bounds testing approach recently developed by mcnown et al 2018 to investigate the presence of cointegration and the empirical findings underscore the presence of cointegration among the time series moreover we find that fdi has a positive impact while energy research innovations have a negative impact on french carbon emissions financial development lowers carbon emissions thereby improving the french environmental quality fdi degrades the environment and thus supports the pollution haven hypothesis in france similarly financial development suggests that financial stability is a required condition for improving environmental quality so are energy research innovations contrarily energy consumption is positively linked with carbon emissions however the relationship between economic growth and co 2 emissions is an inverted u which is a validation of the environmental kuznets curve ekc

the duration of international joint ventures an foreign wholly owned subsidiaries an international joint venture is formed when the partners contribute different benefits to the venture each party learns from the others through the joint venture however the literature suggests that joint ventures are unstable so it is hypothesized that on average an international joint venture will have a shorter duration than a foreign wholly owned subsidiary data on us foreign direct investment fdi abroad and fdi in the united states are applied to test the instability of joint ventures the proportional hazards model is applied while exponential distribution and weibull distribution are used to cross check the results on the whole the results are consistent with the hypothesis in particular the two types of us affiliates are significantly different in duration although the support for the hypothesis from fdi in the united states is weak

fiscal capacity tax effort and optimal equalization grants in this paper we address the question how should the tax burden in a feder ation be distributed across the different jurisdictions so that the social cost of providing government services is minimized using optimal tax theory we derive formulas for the optimal equalization grants that equalize the social marginal cost of raising revenue across all provinces we show how the optimal equalization grants are related to a measure of tax effort based on the marginal cost of public funds and a measure of fiscal capacity that takes into account the elasticity of the tax base and its substitutability with other tax bases

green returns of labor income and human capital empirical evidence of the environmental behavior of households in developing countries abstract an important part of the environmental contamination comes from the daily practices of the households which has been partially ignored in the recent empirical literature the objective of this research is to examine the green returns of labor income and human capital in a developing country ecuador we use data from the national institute of statistics and census nisc during 2010 2016 and panel data econometrics techniques our results show that labor income and human capital plays a relevant role in the environmental behavior of households in this country both variables have a positive effect on the friendly environmental behavior of households in addition we found that the cantons 1 specialized in manufacturing have a poor environmental performance while the cantons specializing in services do not have a clear pattern we also don t find significant differences in the environmental behavior associated with the composition of the ethnic groups of each canton finally natural geographic regions generate differences in the environmental behavior of households one possible implication derived from this research is that those responsible for environmental policy can mitigate pollution by promoting educational programs with environmental content and encouraging improvements in the behavior of households using tax mechanisms

keeping one step ahead of the joneses status the distribution of wealth and long run growth assuming that the utility of each agent depends on its relative wealth position in the society this chapter constructs an endogenous growth model it is shown that even if the subjective discount rates differ across agents there exists a unique balanced growth equilibrium in which each agent owns a positive share of the world wealth it is also shown that if the agents are identical then an increase in savings incentives always raises the long run growth rate but if they are heterogeneous then an increase in savings incentives may lower the long run growth rate

exploring the relationship between energy usage segregation and environmental degradation in n 11 countries numerous studies regarding the economic growth environmental pollution link have struggled to determine the effects of various forms of energy consumption on environmental degradation particularly in the context of emerging economies this study examines the environmental kuznets curve ekc for co2 emissions in n 11 countries during 1990 2014 by segregating three forms of energy consumption renewable biomass and non renewable urbanization and trade openness are additional explanatory variables that are used in the empirical framework using the generalized moments method gmm the empirical evidence confirms the presence of an n shaped relationship between economic growth and environmental degradation for n 11 countries this study analyzed the interaction effects among trade openness biomass consumption and economic growth these interactions had a negative impact on co2 emissions levels of n 11 countries suitable policy recommendations have been provided based on the detailed results

exploring the existence of kuznets curve in countries environmental efficiency using dea window analysis abstract this paper using data envelopment dea window analysis and generalized method of moments gmm estimators examines the existence of a kuznets type relationship between countries environmental efficiency and national income specifically it measures the environmental efficiency of 17 oecd countries by constructing environmental efficiency ratios for the time period 1980 2002 the analysis with the application of dynamic panel data reveals that there isn t a kuznets type relationship between environmental efficiency and income allowing for dynamic effects we find that the adjustment to the target ratio is instantaneous we also find that increased economic activity does not always ensure environmental protection and thus the path of growth is important in addition to the growth itself

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

comparative business failures of foreign controlled firms in the united states we explore the comparative business failures of foreign owned or controlled firms and domestically owned firms original data are collected regarding foreign controlled firms in the u s that filed for bankruptcy protection were involuntarily liquidated or ceased operations mainly due to poor financial performance during the 1978 1988 period our results show that foreign controlled firms fail less often than domestically owned firms the patterns of foreign controlled business failures and the impacts of entry modes ownership types and national culture on the failures of foreign controlled firms are also examined

the size and composition of government expenditure abstract this paper tests several leading hypotheses on determinants of government expenditure the purpose is to avoid omitted variables bias by testing the prominent theories in a comprehensive specification to identify persistent puzzles for the current set of theories and to explore those puzzles in greater depth by looking at the composition of government expenditure and the level of government at which it takes place as well as its magnitude using government financial statistics data from the imf covering over 100 countries from 1970 2000 i look at cross sectional and inter temporal variation in government expenditure and both individual categories of expenditure such as defense education health care and different levels of government central and local among other results i find a new explanation for wagner s law widespread evidence that preference heterogeneity leads to decentralization rather than outright decreases in expenditures that a great deal of the expenditure associated with increased trade openness is not in categories that explicitly insure for risk and evidence that both political access and income inequality affect the extent of social insurance

globalization and location choice an analysis of us multinational firms in 1980 and 2000 in this paper we examine foreign location choices of the top 100 us multinational corporations mncs in 1980 and 2000 we first ask whether there has been a change in mnc foreign location choice in this two decade period second we explore the underlying reasons of location change by focusing on country level factors accounting for firm industry and regional level explanations our findings suggest first that the extent of mncs activities around the globe is more extensive than assumed by regionalists arguments and well beyond ohmae s triad but still less widespread than claimed by the globalists the two main traditions within the globalization regionalization debate second we uncover an interesting de location pattern in this period third we develop an integrative framework where both economic and institutional cultural arguments are shown to influence mncs foreign location choice in different ways we conclude with a discussion of our findings and provide suggestions for future research

income inequality and pollution a reassessment of the environmental kuznets curve abstract improvements in some measures of air and water quality can accompany rising per capita income as illustrated by the so called environmental kuznets curve for pollution variables which show such a relationship we hypothesize that a more equitable distribution of power contributes to these outcomes by enhancing the influence on policy of those who bear the costs of pollution relative to the influence of those who benefit from pollution generating activities an empirical analysis of international variations in seven indicators of air and water quality supports this hypothesis literacy political rights and civil liberties are found to have particularly strong effects on environmental quality in low income countries

service multinationals conceptualization measurement and theory the application of mne definitions measurements and theories to international services is still in its infancy despite the considerable size and growth of this sector there are problems in defining classifying measuring comparing and explaining service mnes but they do not require special definitions and theories still research to date suggests 1 delinking the concepts of multinational enterprise and foreign direct investment under certain conditions and 2 qualifying the nature of ownership internalization and location advantages in fdi theory as far as service mnes are concerned

the causal factors of international inequality in hbox co _ 2 emissions per capita a regression based inequality decomposition analysis this paper uses the possibilities provided by the regression based inequality decomposition fields in res labor econ 22 1 38 2003 to explore the contribution of different explanatory factors to international inequality in hbox co 2 emissions per capita in contrast to previous emissions inequality decompositions which were based on identity relationships this methodology does not impose any a priori specific relationship thus it allows an assessment of the contribution to inequality of different relevant variables in short the paper appraises the relative contributions of affluence sectoral composition demographic factors and climate the analysis is applied to selected years of the period 1993 2007 the results show the important though decreasing share of the contribution of demographic factors as well as a significant contribution of affluence and sectoral composition

endogenous fiscal policies environmental quality and status seeking behavior abstract this paper analyzes endogenous fiscal policy in an endogenous growth model where agents care about social status and environmental quality the quest for a higher status is assimilated to a preference for capital wealth the government uses income tax to finance infrastructure and environmental protection we find that accounting for preferences for social status and environmental quality may lead to an allocation of tax revenue in favor of a cleanup effort to the detriment of infrastructure economic growth is not necessarily and negatively affected by this allocation as it is partly explained by an excessive accumulation of capital wealth due to the quest of status status seeking can however harm economic growth and environmental quality when its motive is important enough finally we show that economic growth may be consistent with environmental preservation but is not necessarily welfare improving as in the case of absence of status seeking behavior

the relationship between international diversification and performance in service firms international diversification is a growth strategy that has a major potential impact on firm performance the relationship between international diversification and firm performance has been extensively studied in the international strategy literature a major gap in the literature has been the non existence of studies that have examined the effect of international diversification on performance in service firms previous studies that have tested the international diversification performance relationship were based on samples of manufacturing firms we argue that the form of the relationship between multinationality and performance is different in service firms we provide a theoretical argument for this claim and hypothesize that there is a u shaped curvilinear relationship between multinationality and performance in service firms our sample consists of 81 major german service firms spanning across four industries results show that there is support for a u shaped curvilinear relationship based on the findings implications and directions for future research are provided

an overlapping generations model of growth and the environment this article analyzes the potential conflict between economic growth and the maintenance of environmental quality in an overlapping generations model short lived individuals make decisions which have long lasting effects on both factor productivity and the environment the model provides a theoretical explanation of observed correlations between environmental quality and income whereby economic growth is associated first with declines then improvements in environmental quality it suggests circumstances in which multiple pareto ranked steady state equilibria may arise and in which sustained growth of both capital and environmental quality may occur overmaintenance of the environment analogous to dynamically inefficient overaccumulation of capital may emerge copyright 1994 by royal economic society

tax competition and tax structure in open federal economies evidence from oecd countries with implications for the european union tax competition arguments suggest that governments that operate in an open economy such as local governments should not and will not rely on non benefit taxes such as the income tax yet we observe reliance on income taxes by local governments in many countries and such reliance changes over time evidence from a panel data set of 13 oecd countries over the period 1975 1984 suggests that competition between levels of government resulting in a vertical fiscal externality and between levels of government at the same level resulting in a horizontal fiscal externality provide some economic rationale for these changes moreover the evidence indicates that the vertical and horizontal fiscal externalities interact these results have some interesting implications for fiscal policy in the european union particulary as the eu continues to evolve one implication for the eu is that enlargement that increases tax base disparities within the eu and is not accompanied by an eu level income tax will tend to lower national income tax rates although this must be qualified because it also depends on the mobility of the population a second implication is that fiscal expansion of the eu to include an eu levelincome tax may tend to lower the reliance of national governments on income taxes through the vertical externality but may also tend to equalize tax bases across countries and so increase reliance on national income taxes through the horizontal externality

relative consumption relative wealth and growth abstract in a growth model where individuals care about their social status measured both by consumption and wealth comparisons we show that status comparison in wealth heightens economic growth while status comparison in consumption may affect negatively economic growth

aspects of governance and hbox co _2 co 2 emissions a non linear panel data analysis the reduction of hbox co 2 emissions has been at the centre of worldwide debates on environmental issues though its inclusion as one of the millennium development goals mdgs by the united nations has changed the focus of relative literature among many one of the world bank s recipes to achieve a higher position toward mdgs has been to undertake reforms for a better governance while the majority of researches focus has been on one single aspect and its relationship with the environment some studies have simultaneously considered two governance dimensions in this paper we focus on the role of several aspects of governance on hbox co 2 emissions this provides us with a chance to explore the possible impacts of all aspects of governance on a more direct measure of emissions that is different to previous researches which have focused on the indirect transmission and considered the maximum of two using the iv method within panel data analysis we show that only one single aspect of governance control of corruption has a negative significant effect on hbox co 2 emissions and its effect has a non linear relationship the non linearity exists in both parametric and nonparametric analysis after controlling for endogeneity

is there an environmental kuznets curve for sulfur abstract most existing estimates of the environmental kuznets curve ekc for sulfur which use samples of mainly high income countries indicate a maximum emissions turning point at middle to lower high income levels of gdp per capita we use a larger and more globally representative sample than previous sulfur ekc studies we find that sulfur emissions per capita are a monotonic function of income per capita when we use a global sample and an inverted u shape function of income when we use a sample of high income countries a model estimated in first differences results in a monotonic ekc when estimated with both high income and global samples reductions in emissions are time related rather than income related

profiling managers to improve export promotion targeting one of the major criticisms of government export promotion schemes in many countries is that they tend to be poorly targeted awareness levels about export schemes among managers of companies at exporting or pre exporting stages of internationalization are often quite low and the perceived usefulness of schemes may decline as companies internationalize and their needs become more specific one solution may be to develop a better understanding of the needs of managers who make export market development decisions and to target segments of managers rather than companies who share similar strengths and weaknesses this study attempts to address these concerns by devising a typology of senior international marketing managers the most senior marketing decisionmakers in a broad multi industry sample of new zealand exporting firms were surveyed the results of the cluster analysis suggest that groups of managers who share similar characteristics can be identified and profiled based on shared international business attitudes and similar levels of knowledge and skills this appears to be a useful method of segmenting international marketing managers to determine what sort of educational and export assistance particular groups may require

the globalization of service multinationals in the triad regions japan western europe and north america in this study we empirically investigate the determinants of foreign direct investment of service multinationals based in the triad regions japan western europe and north america foreign investment decisions of 168 of the largest service firms in nine service industries over the period 1976 1986 are analyzed and hypotheses that are developed based on findings of manufacturing fdi and studies of single service industries are tested using a logistic regression model the applicability of the mne fdi theories to service mnes is tested empirically over a broad range of mne home countries and service industries differences in the international behavior of service mnes based in different countries are uncovered and analyzed