the political economy of tax reform introduction takatoshi ito and anne o krueger part i 1 international interactions between tax systems and capital flows assaf razin and efraim sadka comments toshihiro ihori and john whalley 2 the role of taxation in the development of east asian economies vito tanzi and parthasarathi shome comment joseph y lim part ii 3 tax reform in japan masaaki homma comments hiromitsu ishi and charles e mclure jr 4 the political economy of tax reforms and their implications for interdependence united states charles e mclure jr 5 tax reform in korea taewon kwack and kye sik lee 6 an appraisal of business tax reform in taiwan the case of value added taxation chuan lin comments ching huei chang and kwang choi part iii 7 the dynamic efficiency effect of a change in the marginal capital income tax rate the nakasone takeshita tax reform tatsuo hatta and hideki nishioka comments medhi krongkaew and assaf razin 8 the role of tax policy in korea s economic growth irene trela and john whalley comments anne o krueger 9 aging of population social security and tax reform yukio noguchi comments hiromitsu ishi maria s gochoco and charles e mclure jr 10 bequest taxes and accumulation of household wealth u s japan comparison thomas a barthold and takatoshi ito comments ching huei chang and hiromitsu ishi 11 taxation of income from foreign capital in korea kun young yun comments toshihiro ihori toshiaki tachibanaki and twatchai yonkittikul 12 tax policy and foreign direct investment in taiwan ching huei chang and peter w h cheng comments kwang choi and toshihiro ihori

in search of appropriate methodology from outside the people s republic of china looking in choosing a methodology determines what we can study as well as the range of possible results and conclusions this study took an instrument that had been developed in the west and used extensively in europe and north america to investigate managerial behavior in the people s republic of china for a number of reasons it failed to produce a valid and reliable description of chinese managerial behavior this paper investigates some of the methodogical issues involved in extending western organizational knowledge to the east it raises some fundamental questions about being outside looking in

investment financing decisions and tax policy mists have analyzed the effects of taxes on capital spending most studies assume that firms respond to prices set in centralized securities markets such as market interest rates of tobin s q and firms undertake all profitable investment projects firms choose the mix or finance among internal funds debt and new equity independently the availability of finance does not limit investment the implications for tax policy are clear the marginal tax rate on returns from a new project matters for investment not the firm s average tax burden on returns from its investments in place for firms that face imperfect markets for

does culture affect behavior and performance of firms the case of joint ventures in china this study applies a resource based view of the firm to analyze data from a sample of 898 joint venture firms in china including both joint ventures established by overseas chinese and by firms from western cultures it is hypothesized that culture could influence the timing of entry of joint ventures their investment preferences and performance anovas and regressions were conducted and the results suggest the impact of cultural as well as technological resources this paper concludes with a discussion on the implications of the findings

do r d tax credits work evidence from a panel of countries 1979 1997 this paper examines the impact of fiscal incentives on the level of r d investment an econometric model of r d investment is estimated using a new panel of data on tax changes and r d spending in nine oecd countries over a 19 year period 1979 1997 we find evidence that tax incentives are effective in increasing r d intensity this is true even after allowing for permanent country specific characteristics world macro shocks and other policy influences we estimate that a 10 fall in the cost of r d stimulates just over a 1 rise in the level of r d in the short run and just under a 10 rise in r d in the long run

tension and trust in international business negotiations american executives negotiating with chinese executives the purpose of the study is to shed light on the antecedents and consequences of tension felt during international business negotiations a total of 176 american and chinese executives participated in simulated international business buyer seller negotiations the negotiations were videotaped and the participants completed questionnaires each participant was also asked to review his her videotaped negotiation rate the tension felt on a videotape review form and briefly describe the antecedents of the tension felt the data collected were then analyzed using first a structural equations approach and then a more exploratory content analysis both chinese and american executives felt tension during the negotiations for the chinese greater levels of tension led to an increased likelihood of agreement but also led to lower levels of interpersonal attraction and in turn lower trust for their american counterparts for the americans tension felt decreased marginally the likelihood of an agreement did not affect interpersonal attraction but did have a direct negative effect on trust a series of other cultural differences are also reported the measure of tension felt developed in the study appears to be useful methodologically theoretically and practically

optimality properties of alternative systems of taxation of foreign capital income foreign source capital income taxes are examined from the point of view of optimal taxation in the framework of a simple economy with international real capital flows a taxonomy of alternative systems of such taxation is first presented showing how crediting and other tax parameters induce what are called source based residence based and related systems next tax rates are determined that are optimal from a single country s point of view given those of the others the achievability of these rates under the various systems is analyzed finally tax rates that are optimal from an international point of view are considered again achievability of an international optimum under the various systems is considered leading to the main conclusions that i a pure residence based system in all countries can achieve an international fiscal optimum ii it cannot however be sustained as an equilibrium

the role of key stakeholders in the international joint venture negotiations case studies from eastern europe recent literature has suggested that a key stakeholder may be able to shift the balance of bargaining power during a joint venture negotiation and thus change the outcome of the process this paper explores the role of central and eastern european transitional governments as key stakeholders and how they influence international joint venture negotiations this role is described and analyzed by examining eight dyads of western european and central eastern european enterprises that have recently negotiated agreements the findings suggest that transitional governments as key stakeholders intervene at different stages of the negotiation process have both direct and indirect influences on the process and that they can change the balance of power in the negotiations sometimes to the detriment of their own state owned enterprise

a cross national comparison of consumer research measures the impact of three factors that affect the psychometric rigor of cross national consumer research comparisons is measured in this study conclusions are also drawn about the interactions among these factors and the resultant deterioration in the psychometric quality of the data

contra coercion russian tax reform exogenous shocks and negotiated institutional change the view of institutions as coercion rather than as contracts dominates the comparative politics literature on both institutional creation and the politics of economic reform the emergence of a collectively optimal tax code in russia demonstrates the limitations of this emphasis on coercion this new tax code was not imposed by a strong central leader mandated by international institutions or the result of state capture by powerful economic interest groups rather it is the product of a mutually beneficial exchange between the russian government and the russian oil companies russia s ability to negotiate an effective tax regime also suggests the conditions under which and the microcausal mechanism whereby exogenous shocks promote institutional change and economic reform owing to their mutual vulnerability and interdependence the august 1998 financial crisis generated widely shared perceptions among these actors that the payoffs of cooperation had changed yet the economic reform institution that resulted required a series of incremental strategic moves that established common knowledge

product stereotypes strategy and performance satisfaction the case of chinese exporters does following a product strategy of price leadership result in superior performance satisfaction for chinese exporters does branding products and targeting less developed countries significantly improve chinese exporters satisfaction with export performance results indicate performance satisfaction decreased when chinese firms pursued price leadership product strategies while performance satisfaction increased when chinese exporters used a branding product strategy branding products and targeting other less developed countries with these brands significantly increased performance satisfaction over branding alone

influence of formalization on role stress organizational commitment and work alienation of salespersons a cross national comparative study organizations rely on formalization to coordinate the efforts of employees however this practice has been found to have a negative influence on role stress organizational commitment and work alienation of salespersons though the negative influence of formalization in the united states has been known for some time we still cannot predict if similar relationships would should be observed in other countries because the rationale developed to explain these relationships in the united states did not consider the cultural factors that influence them with such knowledge it would become possible to anticipate the nature of the relationship in different cultural environments such an approach to developing cross national models has been often suggested but seldom implemented by emphasizing the role of culture this study generates practical guidelines for both practitioners and theorists

empirical research in international marketing 1976 1982 this paper reviews empirical research in international marketing published during the period 1976 82 the review focuses on what has been researched and how the research has been conducted this research is evaluated a cooperative multidisciplinary empirical research program in international marketing is then proposed

brexit negotiations from negotiation space to agreement zones brexit is decidedly a big question we agree with international business scholars who say that such questions need to be addressed using an inter disciplinary approach we use bargaining theory models of rational behavior and the negotiation literature to explain various brexit options and predict their consequences considering the lack of relevant experiential knowledge and the multidimensional high stakes negotiations underway it is little wonder that anxiety is growing across all 28 european union member states our analysis supports a coherent approach from rational bargaining model to real life international negotiation we position outcome scenarios in different agreement zones and explore their ramifications

differences in managerial values a study of u s hong kong and prc managers in this study of convergence divergence of managerial values four western developed measures machiavellianism locus of control intolerance of ambiguity and dogmatism and the four dimensions of the eastern developed chinese value survey confucian dynamism human heartedness integration and moral discipline were the measures used the findings indicate that often times both culture and the business environment interact to create a unique set of managerial values in a country

how effective are fiscal incentives for r d a review of the evidence this paper surveys the econometric evidence on the effectiveness of fiscal incentives for r d we describe the effects of tax systems in oecd countries on the user cost of r d the current position changes over time and across different firms in different countries we describe and criticize the methodologies used to evaluate the effect of the tax system on

selling machinery to china chinese perceptions of strategies and relationships chinese perceptions of machinery suppliers from six countries are used to evaluate supplier strategies and the customer relationships formed strategies based on product quality and service had the greatest impact on preferences the relationship formed seemed to reflect mainly the perceived value of the product service package offered friendship in the traditional chinese sense did not seem to be a strong characteristic of these relationships

tax incentives and job creation in the tourism sector of brazil s sudene area summary in recent decades a significant number of developing countries have implemented fiscal incentives programs for the tourism industry as part of their regional development policies the main objective of these programs is to increase local investment and employment as tourism activities are labor intensive little evidence is available however to assess the effect of these policies on job creation in emerging markets in this paper we analyze a program of fiscal incentives introduced by the brazilian federal government in the sudene area in 2002 and in which tourism firms were eligible to participate through a difference in difference estimation we compare the change in the logarithm of local employment in the sudene municipalities before and after 2002 to the change in the same outcome in a group of municipalities that were not affected by the program although our empirical analysis does not measure the efficiency of a similar fiscal policy it is the first one in the literature to show its effectiveness it provides evidence that the fiscal incentives led to a substantial increase in tourism employment in the sudene area we find that over the period 2002 09 municipal tourism employment was on average 30 higher than in the absence of the intervention this result is robust and is not the consequence of either displacement effects or job destruction in neighboring municipalities that had not been targeted by the tax incentives we finally discuss some limitations of our analysis that might open avenues for future research in the field

cross cultural examination of the fishbein behavioral intentions model most of the principal theories associated with consumer behavior have been developed and tested in the united states a question that has been posed by some consumer researchers concerns the applicability of these theories outside of the united states the study reported in this paper is a cross cultural examination of the applicability of the fishbein behavioral intentions model in korea and the united states korea can be characterized as a collectivist culture that is different from the individualist culture dominant in the united states the findings of the study suggest that the fishbein model can be employed to explain consumers behavioral intentions formation in a confucian culture as well as in the united states

neoliberalism and lower class voting behavior in peru it is often assumed that lower classes will resist market oriented neoliberal reforms that impose economic austerity on popular sectors and exacerbate social inequalities however the peruvian cas

the political economy of expenditures by the peruvian social fund foncodes 1991 95 the peruvian social fund foncodes was created by president alberto fujimori in 1991 with the stated objectives of generating employment alleviating poverty and improving access to social services this article uses province level data on monthly expenditures socioeconomic indicators and electoral outcomes to analyze political influences on the timing and geographic distribution of foncodes expenditures between 1991 and 1995 i reach three main conclusions first these expenditures increased significantly before national elections second foncodes projects were directed at provinces in which the marginal political effect of expenditures was likely to be largest third these projects favored the poorest provinces which suggests that the program also had a redistributive function the results are robust to a large number of specifications and controls the peruvian data support predictions made in the literature on political business cycles as well as the literature on political influences on the allocation of discretionary funds

doing business in the 21st century with the new generation of chinese managers a study of generational shifts in work values in china our goal is to develop a profile of chinese managers and in particular a profile of the new generation of chinese managers the purpose for developing this profile is primarily to provide relevant information for non chinese business people especially westerners who plan to engage in business in china this profile is based on measures of individual values individualism collectivism and confucianism relevant to china and business our findings suggest that the new generation manager is more individualistic and more likely to act independently while taking risks in the pursuit of profits however these new managers are likewise not forsaking their confucian values thus they may be viewed as crossverging their eastern and western influences while on the road of modernization

comparative marketing the first twenty five years this article reviews the field of comparative marketing in terms of scope types and depth of studies methodological issues conceptual and managerial payoffs and teaching approaches after its first quarter of a century as an international business topic comparative marketing is still relatively green

swallowing the bitter pill sources of popular support for neoliberal reform in latin america what accounts for the surprisingly widespread popular approval that painful neoliberal reforms elicited in several latin american countries this article compares the explanatory power of two rival hypotheses which draw on conventional rational choice and psychological decision theory the compensation hypothesis claims that governments can engineer support for costly reforms by compensating the losers through targeted social benefits the rescue hypothesis questions this claim and maintains that draconian adjustment only finds support if it promises to revert a deep crisis and avert further losses data from argentina bolivia brazil mexico peru and venezuela suggest that the rescue hypothesis accounts much better for the initial endorsement of neoliberal shock programs immediately after their enactment when these shock programs bring about economic stabilization and recovery targeted social benefits help consolidate support for neoliberalism which a statistical analysis of the impact of social s

u s china trade negotiations practices procedures and outcomes this study sought to examine and identify 1 the mechanics of u s china trade negotiations 2 how a company prepares for such negotiations 3 the factors that contribute to the success or failure of such negotiations and 4 the outcomes of such negotiations data pertaining to these characteristics were collected from 138 u s firms engaged in china trade relationships between certain variables such as extent of preparation for the negotiations type of programs used and incidences of success were examined based on these results implications for management were drawn

cross cultural interaction the international comparison fallacy international management studies have been based primarily on the comparison of managerial behavior in countries around the world often these studies have implied that business people behave similarly with their domestic colleagues as with their foreign counterparts in questioning that assumption this study tests whether intra cultural behavior accurately predicts cross cultural behavior using a negotiation simulation and a sample of 462 japanese american and canadian businesspeople behaviors in cross cultural negotiations were found to differ in some important ways from those in intra cultural negotiations

do taxes matter for foreign direct investment the tax sensitivity offoreign direct investment fdi has important policy implications if fdi is not responsive to taxation then it may be an appropriate target for taxation by the host country this question is examined for mexico by estimating the response of fdifrom retained earnings and transfers from abroad to the tax regimes in mexico and the home country the credit status of multinationals country risk factors and regulatory and trade regimes in mexico fdi in mexico is found to be sensitive to the tax regimes in mexico and the united states the credit status of multinationals country credit ratings and the regulatory environment thus mexico s current policies to dismantle regulations and employ a tax system competitive with the united states are expected to have salutory effects on fdi in mexico the 1980s have seen a remarkable growth in foreign direct investment fdi which has sparked a renewed interest in the effect of fdi on the economic performance of both the host and the home country and in the appropriate government policy toward fdi not surprisingly a critical consideration in this discussion is the responsiveness of fdi to taxation of the income that it generates if fdi is not responsive to taxation then it may be an appropriate target for taxation by the host country which can raise revenue without sacrificing the economic benefits of fdi if however the volume of fdi declines with taxation the host country must consider the trade off between the possible revenue gains from increased taxation and the economic costs of discouraging fdi this issue is very important for countries in which the degree of fdi penetration is large and the revenue raised from taxing fdi represents a significant fraction of total tax revenue for example in ecuador egypt indonesia nigeria peru and trinidad and tobago tax payments by u s corporations alone as a share of host country corporate tax revenues exceed 10 percent alworth 1988 p 33 because of the ready availability of data on investment to and from the united states most of the recent empirical literature on the tax sensitivity of fdi has focused on u s inward fdi in this article we extend the standard methodology used in these studies to examine the effect of taxation on fdi in mexico the recent empirical literature on fdi in the u s is reviewed the salient features of

employees willingness to adopt a foreign functional language in multilingual organizations the role of linguistic identity language holds a central role in sustainable international expansion for multinationals the choice of the functional language can facilitate or hinder communication between headquarters and subsidiary locations in order to communicate effectively with the parent organization host country employees often have to adopt a language that is not native to the subsidiary region we take a subsidiary employee perspective in presenting an interdisciplinary theoretical model of host country employees willingness to adopt a foreign language in multinational organizations the construct of linguistic identity shaped by the linguistic landscape of the host location is introduced as an important determinant in this process specifically the foreign functional language may pose a threat to the employees existing linguistic identity willingness to adopt the foreign functional language may depend upon the extent of this perceived threat we incorporate the effects of foreign language proficiency and individuals motivation for enhancement in the theoretical model both high proficiency in a foreign language and need for social economic and career enhancements can increase individuals willingness to adopt the foreign functional language finally we develop and present implications of the linguistic identity processes for entry mode location and language strategies

a typology of management studies involving culture as a methodological review this paper delineates 6 approaches to researching cross cultural management issues parochial ethnocentric polycentric comparative geocentric and synergistic for each approach assumptions are discussed concerning the similarity and difference across cultures and the extent to which management phenomena are or are not universal the primary types of management questions which can be addressed using each approach are clarified main methodological issues which must be addressed are listed

evaluating the minimum asset tax on corporations an option pricing approach abstract king fullerton methodology cannot assess the minimum asset tax because it cannot handle uncertainty we present an alternative based on option pricing and show how carryover rules depreciation conventions and uncertainty affect the mat burden using brazilian data we show a because of the high intersectoral variance of returns on capital the mat does not reduce sectoral distortions b while high variance raises the mat burden high risk firms are not hit harder by the mat high risk firms also have a high rate of return which reduces the impact of the mat

the impact of journals and authors on international business research a citational analysis of jibs articles in this paper we use citational analysis to examine the influence of individuals and disciplines on international business research we collected citational data over the ten year period 1984 to 1993 from every issue of the journal of international business studies we found that management economics marketing and finance disciplines have had significant influence on international business research and identified researchers such as dunning porter vernon casson rugman and hofstede as having made significant contributions to international business research

corporation tax asymmetries and investment evidence from uk panel data theoretical work has emphasised the potentially powerful impact of corporation tax asymmetries on investment behaviour but empirical work has mainly been confined to the measurement of effective tax rates this paper uses panel data from 597 u k companies to ask are tax asymmetries important to understanding observed investment behaviour an optimising investment model is developed and estimated both as a q equation and a euler equation in which the cost of capital appears careful modelling of asymmetries does not noticeably improve the empirical performance of these equations possible explanations are discussed

cross national comparison of export promotion services the views of canadian and austrian companies export promotion systems in canada and austria are contrasted and their services evaluated from a company perspective the canadian system is government based while the austrian one operates in the private sector apart from the philosophy under which these export support systems operate they differ also in strategic orientation a survey of stratified samples of exporters in canada 271 and austria 312 shows significant differences in perceived usefulness of services given similar exporter needs companies desire more tailored support as well as greater involvement of private sector institutions which are not currently providing export support overall austrian companies appear more inclined to use export support and generally seem more willing to acquire exporting know how externally compared to canadian firms conclusions are offered with respect to improving the respective export promotion systems

international perceptions of cost constraints on voluntary information disclosures a comparative study of u k and u s multinationals the main purpose of this paper is to examine the cost constraints on voluntary information disclosure in a comparative study of the perceptions of financial executives in u k and u s multinationals the study examines the perceived net costs or benefits of disclosing information voluntarily the types of costs involved and the significance of cost constraints in respect of specific items of disclosure the results suggest that while there is substantial agreement on the major cost constraints involved and the individual items giving rise to major net costs there are significantly different perceptions by u k and u s financial executives in terms of the overall emphasis of responses to the issue of cost constraints on voluntary information disclosures

neoliberalism and the transformation of populism in latin america the peruvian case latin american populism is generally associated with the developmental stage of import substitution industrialization it is thus widely presumed to have been eclipsed by the debt crisis of the 1980s and the free market reforms of the neoliberal era however the leadership of alberto fujimori in peru suggests that new forms of populism may be emerging despite the fiscal constraints of neoliberal austerity this new variant of populism thrives in a context where economic crisis and social dislocation undermine traditional representative institutions enabling personalist leaders to establish unmediated relationships with heterogeneous atomized masses political support can be cultivated through populist attacks on entrenched political elites or institutions along with targeted but highly visible poverty alleviation programs this new form of populist autocracy complements the efforts of neoliberal technocrats to circumvent the representative institutions that are integral to democratic accountability the peruvian case thus demonstrates that populism has been transformed rather than eclipsed during the neoliberal era and that it should be decoupled theoretically from any particular phase or model of economic development

learning to compete in a transition economy experience environment and performance does organizational learning as measured by experience in a host country affect international expansion performance if so does such a relationship between experience and performance hold over time how do the environmental forces in the host country affect such a relationship focusing on organizational learning by multinational enterprises mnes operating in a transition economy this study answers these three critical questions by exploring the relationships among experience environment and performance at the subsidiary level based on a recent survey of 108 mne subunits operating in china we find that the intensity and diversity of host country experience is an important predictor of subunit performance while the positive effect of the intensity of experience on performance diminishes over time the impact of the diversity of experience on performance remains unchanged moreover for mnes experiencing greater environmental dynamism complexity and hostility there is a stronger positive relationship between experience and performance

long term economic distress cultural backlash and support for brexit economic and cultural factors are often presented as alternative explanations of brexit most studies have failed to recognize the interplay between contextual economic factors and individual attit

investment tax incentives prices and the supply of capital goods using data on the prices of capital goods this paper shows that much of the benefit of investment tax incentives does not go to investing firms but rather to capital suppliers through higher prices the reduction in the cost of capital from a 10 percent investment tax credit increases equipment prices 3 5 7 0 percent this lasts several years and is largest for assets with large order backlogs low import competition or with a large fraction of buyers able to use investment subsidies capital goods workers wages rise too instrumental variables estimates of the short run supply elasticity are around 1 and can explain the traditionally small estimates of investment demand elasticities in absolute value the demand elasticity implied here exceeds 1

methodological and theoretical issues and advancements in cross cultural research this paper summarizes the issues and concerns of critics of cross cultural research and discusses how they are being addressed by researchers given the state of the art and the complexity of this field of research the author recommends more inductive research and the pursuit of appropriate but not overambitious sampling designs so as to increase our understanding of cultures and encourage the building of richer theory bases taking an optimistic view of the field the author predicts useful contributions by researchers which will enrich the art and science of cross cultural management

inflation tax rules and investment some econometric evidence this paper presents econometric evidence on the effect of tax incentives on business investment in the united states in the period from 1953 through1978 the analysis emphasizes that the interaction of inflation and existing tax rules has contributed substantially to the decline of business investment since the late 1960 s because the investment process is far too complex for any simple econometric model to be convincing i have estimated three quite different models of investment behavior the strength of the empirical evidence rests on the fact that all three specifications support the same conclusion more generally the analysis and evidence show that theoretical models of macroeconomic equilibrium should specify explicitly the role of distortionary taxes especially taxes on capital income the failure to include such tax rules can have dramatic and misleading effects on the qualitative as well as the quantitative properties of macroeconomic theories this paper was presented as the fisher shultz lecture at the fourth world congress of the econometric society 29 august 1980 in aix en province this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this abstract was borrowed from another version of this item

the benefit of crises for economic reforms when expenditures consistently outrun revenue the resulting inflation may have the effect of convincing the public and government that taxes must be raised to finance public investment in the advanced industrial countries income taxation and big spurts in taxation generally have become possible only under the impact of major emergency and crisis mostly in wartime in a number of developing countries in

social pacts and inflation control in new democracies the impact of wildcat cooperation in argentina and uruguay this article examines both the advocacy of social pacts in new democracies and the common assumption that labor presents the chief obstacle to social pacts game theory is used heuristically to demonstrate that in slack labor markets business will be more opposed to pacts than labor because individual workers will make more concessions at the plant level than labor confederation leaders will offer in peak level negotiations an examination of wage bargaining in the first 3 years of the new argentine and uruguayan democracies supports this hypothesis the article closes with a reexamination of the wage centered debate on inflation in contemporary new democracies

corporate tax holidays and investments governments of developing countries commonly adopt tax holidays to encourage investment this article evaluates the incentives provided by company income tax holidays and explains the importance of the timing of depreciation allowances in determining the effective tax rates and the cost of capital to firms considering additional investment during the holiday if an asset is long lived and depreciation allowances for tax purposes are accelerated the tax holiday by preventing depreciation deductions during the periods of peak profits may actually penalize a company for investing during the holiday the closer the investment to the end of the holiday period the more severe the penalty if instead depreciation allowances may be deferred until after the holiday this program of incentives is quite generous to the firm how these sharply contrasting results may emerge is illustrated through estimation of effective tax rates and user costs of capital under tax holiday systems in bangladesh cote d ivoire malaysia morocco and thailand

public opinion and market reforms the limits of economic voting the broadly held view that promarket reforms are good for most people is in conflict with the equally broadly held view that in democracies reforms will generate widespread resistance resistance is expected because reforms typically produce economic downturns at least over the short term under normal circumstances we expect citizens to withdraw support from governments during periods of economic decline if citizens withdraw support then governments worried about the next election may abandon reforms but our expectations should be different of new democracies pursuing promarket reforms citizens may believe governments when they claim that things have to get worse before they get better or that economic stagnation is the fault of the past model research in poland peru and mexico reported in this special issue supports these expectations hence under democracy there is more scope for support of painful reforms than frequently acknowledged

an examination of the psychometric properties of some commonly researched individual differences job and organizational variables in two cultures this study examines the transferability and applicability of selected measures of individual differences job and organizational climate factors across two cultures questionnaires were administered to a sample of 267 white collar bank employees in the u s and 307 bank employees in india the individual difference dimensions examined were four manifest needs sense of competence and locus of control the job factors included variety autonomy identity and feedback the organizational climate factors related to communication stress participation in decision making and self esteem from the workplace the data were analyzed for internal consistency dimensionality and criterion related validity the results showed that the job and organizational climate measures were more reliable and were related more consistently to the criterion measures than the individual difference measures both within and across cultures the results suggested that psychometrically sound measures may be transferable to other cultures

some methodological and analytic considerations in cross national comparative research this article demonstrates one methodological approach to aid in the complex process of making inferences about the meaning and usefulness of observed national differences by using data from an international study of the meaning of working 3 points are made 1 it is important to use multiple methods of measurement for conceptual ideas or domains 2 it is important to use intra country reference group comparisons and 3 it is important to use some form of relative position analysis in addition to score analysis

japan vs silicon valley quality cost trade off philosophies while japanese manufacturing philosophies are said to be based on quality is free notions it is commonly accepted that u s manufacturing centers on a quality is costly belief this paper provides empirical data that test this conceptual division seeking evidence about the quality tradeoff philosophies of u s and japanese electronics manufacturing managers

comparative democratization big and bounded generalizations comparative studies of democratization have produced two types of generalizations those having nearly universal application and those applying to a range of countries within a region in the first category are such arguments as the role of high levels of economic development in guaranteeing democratic sustainability the centrality of political elites in establishing and terminating democracy and deficits in rule of law and state capacity as the primary challenge to the quality and survival of new democracies in the second category are contrasts between recent democratization in post socialist europe versus latin america and southern europe for example in the relationship between democratization and economic reform and in the costs and benefits for democratic consolidation of breaking quickly versus slowly with the authoritarian past the two sets of conclusions have important methodological implications for how comparativists understand generalizability and the emphasis placed on historical versus pr

diagnosing measurement equivalence in cross national research many researchers have pointed out that it is necessary to ensure measurement equivalence in cross national comparative research three aspects of measurement equivalence translation metric and calibration equivalence are necessary to establish the cross national reliability and validity of items used to measure theoretical constructs this paper discusses these issues and proposes two recently developed empirical techniques multiple group lisrel and optimal scaling for use in diagnosing cross national measurement equivalence these techniques are illustrated by reanalysis of a pioneering u s and japanese study the two techniques yield convergent results indicating measurement equivalence for some but not all ordinal level items under consideration the findings demonstrate that the proposed methods are useful diagnostic tools for exploring measurement equivalence several suggestions for reducing the likelihood of problems with measurement equivalence and a number of methods for dealing with items where lack of equivalence persists are also discussed

multiparty cooperation and performance in international equity joint ventures previous studies have examined the relationship between cooperation and performance in international equity joint ventures ejvs mostly at the partner level this study revisits the issue at multiple levels and considers vertical and horizontal cooperation among the foreign partners the local partner and the venture management team the study also examines how goal incongruence between partners and market uncertainty affect the tripartite relationships between cooperation and performance the test results show a strong positive impact of cooperation between partners on performance as perceived both by the partners and by the venture management team one partner s cooperation with the venture management team is perceived favorably by that party but not necessarily by the other party unless both partners share the same goal market uncertainty requires stronger cooperation at all levels to improve performance in ejvs

host country reforms and fdi inflows how much difference do they make summary this study examines the effects of various policies on foreign direct investment fdi flows from the perspective of the eclectic theory of international investment and hence the advantages of foreign ownership host country location and internationalization host country policies can influence fdi flows primarily through their influence on the advantages of location in the host country pooled cross section and time series data for 49 less developed countries ldcs over 1970 95 are used to examine the effects of several different types of policy institutional variables including corporate tax rates tariff rates the degree of openness to international capital flows exchange rate distortions contract enforcement nationalization risk bureaucratic delay and corruption a multivariate analysis of the effects on fdi flows of each type of policy with and without controls for other relevant determinants is conducted two different sources of fdi data are employed as well as two different measures of capital controls although there are methodological problems in estimation and especially collinearity problems and relatively severe availability constraints for some of the relevant measures the results demonstrate the relevance and importance for fdi flows of many of the policy institutional variables under study they also indicate that the results from panel methods yield results that differ rather significantly from those obtained from pure cross section analysis because of complementarity between the various elements of a healthy investment climate the effects of some policy reforms estimated from models which do not control for changes in other policies may overstate the effectiveness of individual policy reforms

linking product and process innovations and modes of international sourcing in global competition a case of foreign multinational firms in increasingly complex global competition multinational firms u s and foreign alike have stepped up international sourcing of components and finished products to serve various markets since an increasing portion of global competition is shaped by european and japanese multinational firms with due emphasis on product quality and manufacturing it is an opportune time to examine the like among their product development manufacturing and sourcing activities those european and japanese multinational firms marketing products in the united states are chosen as subjects of this study

an empirical comparison of soviet and american business negotiations fifty six soviet businesspeople and 160 american businesspeople participated in simulated intracultural one on one buyer seller negotiations all participants completed questionnaires after the negotiation sessions and six negotiators from each cultural group were videotaped during the interactions analysis of the questionnaire data indicated that soviet negotiators achieved higher individual profits when using a competitive approach in negotiations this result is in contrast to a more cooperative approach associated with higher profits for the american participants analysis of the videotapes suggests both similarities and differences in observed bargaining behaviors across the two cultural groups

tax incentives for business investment a primer for policy makers in developing countries abstract the use of tax incentives is widespread even though the available empirical evidence on the cost effectiveness of such incentives in stimulating investment is highly inconclusive this paper is primarily intended as a primer on the use of tax incentives for policy makers especially those in developing countries it discusses the objectives cost effectiveness and transparency of implementing tax incentives assesses the comparative merits of alternative forms of such incentives and provides a review of the empirical literature its main conclusions are that the justification for the use of tax incentives should be limited to the rectification of market failures and that the preferred form of tax incentives are those that provide for faster recovery of investment costs

the ineffectiveness of effective tax rates on business investment a critique of feldstein s fisher schultz lecture abstract in his fisher schultz lecture martin feldstein 1982 examined the effects of non neutral tax rules on business investment by estimating three econometric models and he concluded that the rising rate of inflation has because of the structure of existing u s tax rules substantially discouraged investment in the past 15 years in a detailed examination of feldstein s effective tax rate model and a less extensive review of his other formulations neoclassical and return over cost we advance a number of important and independent criticisms and find that these three models fail to support feldstein s conclusion that taxes have exerted a significantly depressing effect on net investment during the recent inflation episode

management style and productivity in two cultures global competition has motivated an increasing number of united states firms to set up production facilities in mexico this study examines productivity and management style differences in a mexican maquiladora operation and its u s parent plant likert s system 4 theory was used as the theoretical basis of comparison as hypothesized significant differences were found in the management systems while productivity at the two facilities was equal

building support for taxation in developing countries experimental evidence from mexico abstract drawing on insights from the literature on institutional design how rules shape behavior to achieve desired outcomes this article examines how certain design features of taxes such as allowing for civil society oversight earmark mechanisms that direct tax revenue for a specific purpose and sunset provisions that make the duration of taxes finite affect political support for tax reforms it also evaluates how three important aspects of the fiscal exchange trust in government perceptions of the public good and level of income shape the effect of these design features based on an original survey experiment focusing on the provision of public safety in mexico i find that these design features increase political support for taxation especially among those with low trust in government and low income these findings have important implications not just for mexico but also a number of other countries across latin america that have both low levels of extraction and increased public spending imperatives

the importance of work goals an international perspective the paper probes into the basic question of what individuals seek from working results from a representative sample of the labor force in seven countries n 8192 showed that the two most dominant work goals are interesting work and good pay these were consistent internationally across different organizational levels between the genders and among different age categories

stabilization and its discontents argentina s economic restructuring in the 1990s abstract this paper assesses the argentine stabilization and market reform strategies since 1989 we argue that argentina may be penned in by its own success exchange rate targeting quelled inflation but the resulting real appreciation has limited export and employment growth microeconomic reforms raised efficiency but have threatened income distribution and hence political stability exclusive styles of policy making helped enact reform but have led to corruption and policy insensitivity and contributed to rising social discontent we close by suggesting how a second generation of reforms could tackle these issues and spread the proceeds of reform to a wider segment of the argentine public

altered states taxes and the location of foreign direct investment in america this paper compares the distribution between u s states of investment from countries that grant foreign tax credits with investment from all other countries the ability to apply foreign tax credits against home country tax liabilities reduces an investor s incentive to avoid high tax foreign locations state corporate tax rate differences of 1 percent are associated with differences of 9 11 percent between the investment shares of foreign tax credit investors and the investment shares of all others suggesting that state taxes significantly influence the pattern of foreign direct investment in the united states copyright 1996 by american economic association

the long path to the ibm mexico agreement an analysis of the microcomputer investment negotiations 1983 86 studies of negotiation have proliferated but few especially in international business have systematically detailed the complexity of negotiations in situ this paper describes and explains the widely publicized controversial talks between ibm and the mexican government that followed ibm s proposal to established a 100 owned personal computer assembly plant near guadalajara

opening the black box of csr decision making a policy capturing study of charitable donation decisions in china this policy capturing study conducted in china investigated the cognitive basis of managerial decisions to make a corporate charitable donation a global issue in the context of corporate social responsibility csr research and practice participants n 376 responded to a series of scenarios manipulating pressure from the five stakeholders government customers competitors employees and shareholders most commonly addressed by csr research the independent variables examined included organizational factors industry ownership previous company donation firm size firm age and perceived ceo attitudes toward charity and the participants personal values results indicate a large positive effect of shareholder and governmental pressure on the decision with lesser positive effects from customers and competitors surprisingly employee pressure had a negative effect on the decision to make a charitable donation further personal values and perceived ceo attitudes toward charity were significantly related to the decisions participants made in line with our theorizing the findings indicate that a combination of personal organizational and institutional factors was salient in the minds of decision makers

optimal taxation and optimal tax systems the theory of optimal taxation has for the pas two decades been the reigning normative approach of taxation this paper argues that in its current state optimal tax theory is incomplete as a guide to action concerning many critical issues in tax policy it is incomplete because it has not yet come to terms with taxation as a system of coercively collecting revenues from individuals who will tend to resist the coercive nature of collection taxes implies that the resource cost of implementing a tax system have been and will continue to be a critical determinant of appropriate tax policy the paper first presents the three cornerstone propositions of optimal tax theory and then it discusses the influence of these propositions on recent tax policy developments it concludes by sketching an alternative to optimal taxation called the theory of optimal tax systems which embraces the insights of optimal taxation but also considers the technology of raising taxes and the constraints placed upon tax policy by that technology the optimal tax systems perspective is shown to shed light on the choice of tax instruments the problem of tax evasion and the appropriate tax treatment of capital income this abstract was borrowed from another version of this item

contrasting rational and psychological analyses of political choice we contrast the rational theory of choice in the form of expected utility theory with descriptive psychological analysis in the form of prospect theory using problems involving the choice between political candidates and public referendum issues the results showed that the assumptions underlying the classical theory of risky choice are systematically violated in the manner predicted by prospect theory in particular our respondents exhibited risk aversion in the domain of gains risk seeking in the domain of losses and a greater sensitivity to losses than to gains this is consistent with the advantage of the incumbent under normal conditions and the potential advantage of the challenger in bad times the results further show how a shift in the reference point could lead to reversals of preferences in the evaluation of political and economic options contrary to the assumption of invariance finally we contrast the normative and descriptive analyses of uncertainty in choice and address the rationality of voting

redistributive promises and the adoption of economic reform this paper analyzes the relationship between economic reform and the democratic process to ask the following question does the likelihood of adoption of an economic reform increase with an increase in the efficiency benefits from that reform a priori we might expect that this likelihood should increase monotonically for two reasons first economic reform results in an increase in the size of the national pie if the government has the ability to make compensatory tax transfers an increase in each citizen s income is possible second a larger economic reform results in a greater number of winners this might also be expected to reinforce the political support for economic reform so we should expect a reform with greater efficiency benefits to a larger population to have a greater chance of adoption by the government however in this paper we show that this intuition is mistaken in particular we demonstrate that there exists a certain non monotonicity between the distribution of winners from economic reform and the probability of its adoption an increase in the number of winners may lower rather than increase the likelihood of adoption of economic reform in particular even though reforms that benefit a minority or an overwhelming majority are adopted reforms that benefit a smaller majority are not adopted

developed country mnes investing in developing economies progress and prospect this study reviews research from 1970 through 2016 on developed country multinational enterprises dmnes entering and competing in developing economies to identify the current state of knowledge of this research and push it further we review the literature using bibliometric and qualitative content analyses covering leading journals and books we articulate frontier issues that are understudied yet critical to both theorization and practice of dmnes in developing economies we discuss the findings and conclusions from prior research along five key areas 1 entering developing economies 2 organizing local activities 3 managing alliances and joint ventures 4 competing in dynamic environments and 5 dealing with institutions governments and society we offer prospective insights into future agenda that have important implications for mne strategies and decisions and propose frontier directions that encompass strategic localization reverse transfer and adaptation co evolution with local business ecosystems reorganizing and restructuring and strategic responses to institutional and market complexity

why is trade reform so popular in latin america a consumption based theory of trade policy preferences despite wavy national economies and a perception among observers that economic globalization is growing increasingly unpopular aggregate support for free trade remains quite high across latin america this finding is robust to the wording of survey questions and has been quite resilient through time even in the face of economic stagnation current theories of trade preferences including the widely applied heckscher ohlin model do not explain this trend instead the author proposes a theory of trade preferences based not on what citizens produce but on what they consume statistical analyses of different surveys including one conducted in fourteen latin american countries demonstrate that a consumption based approach best accounts for trade preferences across individuals and countries moreover the theory provides an explanation for the overall popularity of free trade in latin america citizens recognize and appreciate the lower price increased variety and higher quality of goods that have come in the wake of trade liberalization

support for foreign ownership and integration in eastern europe economic interests ideological commitments and democratic context western models of popular support for economic integration usually stress costs and benefits this article suggests that one cannot ignore the predominance of socialist economic values in east central europe consequently it is argued and supported that a individual level support for foreign ownership is best explained by ideological commitments to market ideals b publics in more economically liberal countries more strongly support the idea of foreign ownership and c citizens who reside in democratic countries which experience greater controversy over foreign ownership are less likely to accept the idea of foreign ownership just as they have a more negative image of the european union theoretically the study documents the limited applicability to eastern europe of western based models practically it helps explain opposition to foreign ownership and more generally increasing controversy over the eu in first wave accession states

are tax credits effective in developing countries the recent uruguayan experience investment promotion through tax incentives has been a key component of the growth strategies pursued in uruguay by the last three administrations a new regime was established regulated by executive decree 455 which implemented a major overhaul in the main channel for subsidizing investment this regime immediately generated a battery of researchable questions about its effectiveness and efficiency using a large data set first put together for this study from firm level administrative records kept by the tax collection and pensions institutes between 2005 and 2011 we test the hypotheses of significant and positive effects of obtaining a tax credit through the new regime on investment and employment outcomes a matched difference in differences strategy confirms that the promotion regime introduced in 2008 had a statistically significant effect on the firms rate of investment around 11 percent while the effects on employment growth rate were more ambiguous these findings are buttressed by several robustness tests further probing uncovers heterogeneity along the promotion timeline with the greatest effect on the investment rate occurring in a project s first year

do pro market economic reforms drive human rights violations an empirical assessment 1981 2006 liberals argue that economic policy reforms will benefit most in terms of better access to goods less inflation and better economic opportunities critics of market reforms among them marxists critical theorists skeptics of globalization as well as a large portion of the ngo community see the majority as losers from such reform expecting resistance that would lead to political repression they suggest that free market policy reforms are analogous to swallowing the bitter pill we make use of the change in the index of economic freedom as a measure of market liberalizing reforms employing data from a panel of 117 countries for the period from 1981 2006 our results show a strong positive association between reforms towards more free markets with regard to governments respect for human rights controlling for a host of relevant factors including the possibility of endogeneity the results are robust in relation to sample size alternative data and methods and a sample of only developing countries and they are substantively quite large our results support those who argue that freer markets generate better economic conditions and higher levels of social harmony and peace and it seems as if getting there is less problematic than people generally think in fact halfhearted measures and backsliding that prolong crises could be more dangerous to human rights