the curious case of corporate tax avoidance is it socially irresponsible in contrast to many aspects of the social responsibility of business csr scholarship has been largely silent on the issue of the payment of corporate tax this is curious because such tax payments are often considered a fundamental and easily measured example of a company s citizenship behavior however because the payment of corporate tax can often be legally avoided this activity represents a boundary condition for csr if the law and csr suggest that a company should pay its fair share of tax yet many successful companies actively avoid this social obligation should they be considered socially irresponsible this paper explores the issue of tax avoidance and the implications it has for any credible definition and measure of csr it also highlights an aspect of corporate practice that is deliberately hidden from public view

fiscal paradise foreign tax havens and american business the tax haven affiliates of american corporations account for more than 20 percent of u s foreign direct investment and nearly a third of the foreign profits of u s firms american companies report extraordinarily high profit rates on their tax haven investments in 1982 this behavior implies that the revenue maximizing tax rate for a typical haven is around 5 8 percent american and foreign investment in tax havens has an uncertain effect on u s tax revenue but since low tax rates encourage american companies to shift profits out of high tax foreign countries it is possible that low foreign tax rates ultimately enhance u s tax collections

whose business is it anyway this article examines how gender may account for productivity gaps across enterprises first using data from six countries in sub saharan africa the article demonstrates that the extent and significance of any productivity gap by gender depends critically on the criteria used to classify an enterprise using a definition of female participation in ownership there are few differences in average performance measures however a 12 productivity gap emerges when a tighter definition based on decision making control is used second the article examines which entrepreneurial characteristics education management skills experience and the motivation for being an entrepreneur are most associated with higher productivity the findings reveal that there are some gender gaps in the prevalence of these characteristics but that these do not account for the overall gender productivity gap rather while women benefit as much as men from education and management skills there are non linear impacts by gender in the benefits of having a family background in entrepreneurship sons rather than daughters benefit from having a father that was an entrepreneur or from joining a family enterprise

inventories cycle in an augmented rbc model abstract we propose an augmented version of the rbc model that can take into account the existence of lags in observation of demand shocks this hypothesis seems to be a good framework to account for inventories fluctuations we find some evidence showing the introduction of lag in observation as well as the existence of monetary shocks improve the ability of the model in matching the observed fluctuations

pay and productivity differences between male and female veterinarians the author uses data from annual wage surveys conducted in 1994 and 1995 by medical economics research group to study differences in pay and productivity between male and female veterinarians in the wage salary sector the gender gap in average earnings was 15 when controls for various observable characteristics are added to the analysis the earnings gap narrows to 9 based on the most conservative estimates using unique revenue production measures in an analysis holding other factors constant the author finds that women s productivity was not statistically different from men s together the findings of gender differences in earnings but not in productivity are consistent with the presence of wage discrimination but the author explores other possible explanations as well

circumvention of trade defence measures and business ethics with the rise of globalization the debate around free trade versus fair trade and liberalism versus protectionism has become increasingly complicated at times the regulations of the world trade organization seem to pit developed markets against emerging markets as governments attempt to expand international trade while at the same time protecting local industry to this end antidumping measures have been extensively developed as a way to block foreign low cost goods often produced in emerging countries from entering domestic markets in response some exporters have begun to circumvent these antidumping measures using strategies such as transhipment assembly operations and slightly modified products while previous studies have addressed the ethical aspects of antidumping measures this study will focus on the ethics of circumvention strategies with a special focus on the theories on legal compliance and specifically civil disobedience and conscientious evasion

gender differences in labor market decisions evidence from rural mexico this study examines gender employment differences in mexicos rural sector using the 1994 survey of rural entrepreneurs and financial services it employed an approach that separate the effects of initial endowments from the gender differences that can be attributed to preferences available opportunities labor market discrimination and other market conditions all of which referred to as labor market structural issues findings show that higher levels of education are associated with a higher employment propensity although the variable for some secondary schooling is not significant for men as expected married men are more likely to be employed than single men while for females the opposite results ensues which indicate that women in rural areas tend to specialize in non market activities particularly after marriage also gender differences in labor market experience proxied by age seems to influence the self employment choice these results have implications for public policy aimed at reducing gender inequality in labor market outcomes in rural mexico the main lesson is that policies that focus solely on individual endowments could have a limited impact on reducing gender inequality if they are not accompanied by policies addressing structural supply and demand factors that are unique to the study population and that influence the choice of women to enter and remain in the workforce

labor tax avoidance and its determinants the case of mafia firms in italy this paper develops two new measures of labor tax avoidance ltav based on social contribution expenses reported in financial statements and tests them and their determinants within a sample of 224 italian firms defined as legally registered mafia firms lmfs due to having been confiscated at some point by judicial authorities in relation to alleged connections with italian organized crime overall our results reveal that before confiscation lmfs engage more in ltav than lawful firms do whereas after confiscation there is no significant difference between both types of firm furthermore we find that several factors have a significant influence on the probability of engaging in such a practice this study can enhance further research on the effectiveness of our measures and on the determinants of ltav in other contexts and for other types of firms moreover these measures can be added to the other direct and indirect methods commonly employed to measure and detect undeclared work representing a primary means of ltav finally our study allows inferring conclusions on the relation between corporate social responsibility and tax avoidance suggesting that socially irresponsible firms such as lmfs are more likely to adopt this practice

how well do linear approximation methods work abstract in this paper we investigate the accuracy of approximating policy functions for three different approximation methods in the context of a neoclassical model with a production tax we find that a variant of the king plosser and rebelo procedure yields the best approximations overall but that in certain instances researchers may be better off using a discrete state space solution to the euler equations of the model

unemployment and the business cycle in a small open economy g m m estimation and testing with french data abstract what is a relevant model for the european business cycle in this paper the empirical performances of three models are compared a canonical walrasian r b c framework its extension to the case of a small open economy and a version of this model with search and wage bargaining on the labor market structural parameters of the models are estimated using g m m and their abilities to reproduce the french business cycle taken as representative of the european business cycle are tested only the small open economy with unemployment is able to generate theoretical moments that match their empirical counterparts

is success hereditary evidence on the performance of spawned ventures a common phenomenon in entrepreneurship is that employees turn away from employment to found their own businesses prior literature discusses the former employers characteristics that influence the creation of entrepreneurial ventures an investigation of whether these characteristics also affect the success of the spawned ventures is missing so far this paper contributes to the literature by showing that entrepreneurial ventures spawned by well performing firms are financially more successful than ventures stemming from poorly performing firms this suggests that spawned entrepreneurs are able to exploit valuable knowledge from their previous employers which impacts their ventures performance positively the analysis is based on a linked employee employer data set for the netherlands for the period 1999 2004

responsibility in paradise the adoption of csr tools by companies domiciled in tax havens in contrast to the recent rise to economic importance of offshore finance centres ofcs the topic of taxation has so far created little interest among scholars of corporate social responsibility csr this paper makes two contributions to addressing this lacuna applying a range of influential normative theories of ethics it first offers an ethical evaluation of tax havens second the paper examines what use large firms that are headquartered in two ofcs bermuda and the cayman islands make of formal csr tools the emerging duplicity in tax haven based companies professing social responsibility highlights once more the political nature of csr where at least some firms and or industries can successfully limit government power to enact regulation as well as shape the discourse around csr the study of csr in ofc based firms thus calls into question the usefulness of the often quoted definition of csr as going beyond the law

reducing start up costs for new firms the double dividend on the labor market starting a firm with expansive potential is an option for educated and high skilled workers if there are labor market frictions this additional option can be seen as reducing the chances of ending up in a low wage job and hence as increasing the incentives for education in a matching model we show that reducing the start up costs for new firms results in higher take up rates of education it also gives rise through a thick market externality to higher rates of job creation for high skilled labor as well as average match productivity we provide empirical evidence to support our argument

what do we really know about wages the importance of nonreporting and census imputation in the most frequently used microdata sets over a quarter of all respondents now refuse to answer some questions about their incomes the census bureau has dealt with this problem which has been increasing in severity over time by imputing incomes of non respondents their imputation procedure called the hot deck essentially matches nonrespondents with demographically similar donors in this paper we evaluate the census imputation methodology and raise some questions first the census procedure is tied to commonality of events in the population rather than the more appropriate informational content of regressors clearly the census procedure severely understates income in certain occupations because it is based on the apparently invalid assumption that income does not affect reporting propensities it most likely understates average incomes as well

indivisible labor and the business cycle abstract a growth model with shocks to technology is studied labor is indivisible so all variability in hours worked is due to fluctuations in the number employed we find that unlike previous equilibrium models of the business cycle this economy displays large fluctuations in hours worked and relatively small fluctuations in productivity this finding is independent of individuals willingness to substitute leisure across time this and other findings are the result of studying and comparing summary statistics describing this economy an economy with divisible labor and post war u s time series

labor productivity and the business cycle can r b c models be saved abstract standard r b c models do not enable one to reproduce the main labor market stylized facts employment is more variable than productivity and average productivity leads the cycle in order to mimic these features we consider a model with indivisible labor labor hoarding and adjustment costs the model is then simulated and compared to u s stylized facts we show that government expenditure shock and some specific labor adjustment costs are necessary to explain the lead of the average productivity over the business cycle

endogenous business cycle propagation and the persistence problem the role of labor market frictions contrasting sharply with a recent trend in dsge modeling we propose a business cycle model where frictions and shocks are chosen with parsimony the model emphasizes a few labor market frictions and shocks to monetary policy and technology the model estimated from u s quarterly postwar data accounts well for important differences in the serial correlation of the growth rates of aggregate quantities the size of aggregate fluctuations and key comovements including the correlation between hours and labor productivity despite its simplicity the model offers an answer to the persistence problem chari et al 2000 that does not rely on multiple frictions and adjustment lags or ad hoc backward looking components we conclude modern dsge models need not embed large batteries of frictions and shocks to account for the salient features of postwar business cycles

time use patterns and women entrepreneurs the twentieth century saw a dramatic increase in the number of women in the labor force as well as a steady increase in the number of selfemployed women during the past three decades this increase in labor force participation represents a striking change in the allocation of women s time between work and home activities despite the growing literature examining self employed women little is known about how self employed women divide their time between work and other life activities the flexibility afforded by self employment is often regarded as a way to better balance work and home activities indeed the existing econometric studies indicate that women choose self employment primarily because of family or lifestyle factors theresa devine 1994 richard k caputa and arthur dolinsky 1998 richard j boden 1999 greg hundley 2000 yet studies outside the economics literature seem to indicate that self employed women do not necessarily experience more family satisfaction holly e buttner and dorothy p moore 1997 saroj parasuraman and claire a simmers 2001 richard demartino robert barbato and paul h jacques 2006 a source of the difference might be that the econometric studies use human capital acquisition and entrepreneurship

inflexible prices and procyclical productivity hall has shown that with perfect competition and price flexibility total factor productivity measured using labor s share either in revenues or in costs will be acyclical regardless of the level of labor hoarding we show that if firms producing a homogeneous good under constant returns must pick their prices before demand is known both measures of productivity become procyclical the model implies that productivity should be more procyclical the more important is labor hoarding empirically productivity is more procyclical in industries and in nations where labor hoarding appears more important

corporate contributions altruistic or for profit existing literature has focused on three rationales for corporate philanthropy through the firm giving corporate statesmanship and profit motivated giving the profit motivation argument was exa

questioning organizational legitimacy the case of u s expatriates it has been estimated that u s companies with global business operations can reduce their u s tax bill by up to 10 percentage points if they reincorporate in a zero or low tax offshore jurisdiction but this activity at a time of national crisis following the september 11 terrorists attacks and recent spate of corporate scandals has received a less than sympathetic response from the u s media ordinary taxpayers shareholders and politicians as concerns are raised about the reduction of the tax base and the lack of oversight and regulation in offshore centres offshore reincorporation has been condemned as immoral unconscionable dishonest and unpatriotic accusations that cast doubt on the legitimacy of the companies concerned in question is their right to conduct business in the u s and in particular their right to still be viewed as american their legitimacy once bestowed so readily by the company s shareholders is now being questioned not only by shareholders but also the media politicians government regulators pension funds and labour unions expatriate companies have been slow to respond to questions of their legitimacy viewing their offshore move as a financial decision needing only the consent of their shareholders however times have changed and corporate legitimacy is now in the hands of all the company s stakeholders companies will need to explicitly consider the determinants of their legitimacy and the implications of the implied social contract under which they operate to remain relevant in the days ahead

the demand for tax haven operations what types of firms establish tax haven operations and what purposes do these operations serve analysis of affiliate level data for american firms indicates that larger more international firms and those with extensive intrafirm trade and high r and d intensities are the most likely to use tax havens tax haven operations facilitate tax avoidance both by permitting firms to allocate taxable income away from high tax jurisdictions and by reducing the burden of home country taxation of foreign income the evidence suggests that the primary use of affiliates in larger tax haven countries is to reallocate taxable income whereas the primary use of affiliates in smaller tax haven countries is to facilitate deferral of u s taxation of foreign income firms with sizeable foreign operations benefit the most from using tax havens an effect that can be evaluated by using foreign economic growth rates as instruments for firm level growth of foreign investment outside of tax havens one percent greater sales and investment growth in nearby non haven countries is associated with a 1 5 to 2 greater likelihood of establishing a tax haven operation

straight time and overtime in equilibrium abstract we formulate an equilibrium model of straight time and overtime wages by imposing restrictions on agents consumption sets and using a commodity space that includes employment lotteries we extract some time series implications from a linear quadratic approximation to our model evaluated at particular parameter values we use our model informally to interpret some features of observed time series for wages and employment

offshore pariahs small island economies tax havens and the re configuration of global finance the stock of wealth held offshore is estimated at us 6 trillion many small island economies sies host offshore finance centers and some sies are highly dependent upon offshore finance extreme examples have over 90 of government revenues derived from finance sector activities since 1998 a series of international initiatives have been launched to combat harmful tax practices money laundering and inadequate financial regulation these initiatives will transform the economies of many sies this paper explores the dependence of many sies upon offshore finance and the barriers to diversification arising from their smallness and unique political economies

being in someone else s shoes the role of gender in nascent entrepreneurship several studies have shown the existence of significant differences in the rate of new business creation between men and women specifically it has been shown that women are much less likely to be involved in entrepreneurship than men worldwide it is not yet understood however if such differences are the result of personal characteristics of the individual and of her economic environment or are instead the result of universal and perhaps evolutionary phenomena our empirical analysis is conducted using representative samples of population for 37 countries and a special form of bootstrapping that allows us to equalize individuals conditions and as a result analyze the choices of men and women put in identical economic environments and socio economic circumstances

going to haven corporate social responsibility and tax avoidance this study examines the endogenous relation between corporate social responsibility csr and tax avoidance by focusing on a common strategy of corporate tax avoidance i e establishing entities in offshore tax havens using hand collected data on a sample of u s firms we find that firms csr ratings increase substantially in the two years after they first open tax haven affiliates we provide evidence by using the controlled foreign corporations cfc look through rule enacted by congress in 2006 that facilitates offshore profit shifting we find that firms that are affected by the cfc legislation increase their csr practices in response overall our results are consistent with the risk management theory which argues that firms hedge against the potential negative consequences of aggressive tax avoidance practices through an increase in positive csr activities

explaining international variations in self employment evidence from a panel of oecd countries organisation for economic cooperation and development oecd data from 1972 to 1996 reveals substantial differences in the levels and trends of self employment rates across countries this article uses recently developed panel integration and cointegration techniques to explore the determinants of aggregate self employment rates we find that within the panel self employment rates are positively and significantly related to personal income tax rates and negatively and significantly related to the unemployment benefit replacement rate this accords a central role to government tax and transfer policies in contrast to nonrobust influences from macroeconomic variables which have been widely used in previous studies

the effect of immigration on native self employment we examine the impact of immigration on self employed natives in a new general equilibrium model of self employment and wage salary work a range of plausible parameter values implies small negative effects of immigration on native self employment rates and earnings using 1980 and 1990 census microdata we then examine the relationship between changes in immigration and native self employment rates and earnings across 132 of the largest u s metropolitan areas we find evidence suggesting that self employed immigrants displace self employed natives but do not have a negative effect on native self employment earnings the effects are much larger than those predicted by the theoretical model

business codes of multinational firms what do they say business codes are an oft cited management instrument but how common are codes among multinationals and what is their content in an unprecedented study the codes of the largest corporations in the world have been collected and thoroughly analyzed this paper presents the results of that study of the 200 largest companies in the world 52 5 have a code more than half f these codes describe company responsibilities regarding quality of products and services 67 adherence to local laws and regulations 57 and the protection of the natural environment 56 many codes make reference to principles governing stake holder relations e g transparency 55 honesty 50 and fairness 45 corporate core values e g teamwork 43 appropriate conduct among employees e g discrimination 44 and intimidation 43 and treatment of company property by employees e g conflict of interests 52 corruption 46 and fraud 45 monitoring compliance with the code is addressed in 52 of the codes based on this content study three types of codes are distinguished the stakeholder statute 72 the values statement 49 and the code of conduct 46 the results of this inquiry present a benchmark for the evaluation and development of both individual and international business codes

on the regional labour market determinants of female university enrolment in europe casarico a profeta p and pronzato c d on the regional labour market determinants of female university enrolment in europe regional studies this paper empirically investigates how young women s decisions of investing in post secondary education are affected by labour market outcomes of older women living in the same region eu silc data on educational decisions of women who completed secondary schooling are used and indicators of the regional labour market are constructed exploiting regional and time variability it is found that the share of working women with young children of women with managerial positions and the self employed positively affect the probability to enrol significant effects of these variables for men are not found

a study of codes of ethics for mexican microfinance institutions most scholarly interest in codes of ethics or conduct has focused on traditional companies little is known about the codes of social enterprises or hybrid organizations such as microfinance institutions mfis our paper provides a comparative case study of the codes of a mexican microfinance network and seven mfis using the corporate integrity model we analyze the content of mfis codes compared to those of traditional organizations we then examine to what extent some specific features of mfis such as their mission target group and applied credit methodologies are factors that determine the content of their code we find that mfis codes like those of traditional companies include traditional stakeholder principles nevertheless they put greater emphasis on socially oriented principles or on terms such as people and common good mfis codes differ with respect to the items they include and exclude and the size of the covered sections we also find that these codes attempt to address prevailing concerns in microfinance but rarely tackle two critical debates namely levels of interest rates and of profitability we finally argue that it is difficult to move toward a global code owing to regional disparities and the variety of organizational models and missions