rafmacalaba/data-use-mentions-extended huggingface dataset:
Quotas: intra-corporate transferees; and Residency is required to practice

# **Annex D: List of regulatory transparency measures on MNP covered by the OECD STRI data**

Cost to obtain a business visa (USD); Duration of visa for crew: number of months allowed by the visa; Duration of visa for crew: number of months allowed by the visa: aircrew; Duration of visa for crew: number of months allowed by the visa: seamen; Duration of visa for crew: number of months allowed by the visa: truck drivers; Multiple entry visa for business visitors; Multiple entry visas are allowed for crew; Multiple entry visas are allowed for crew: aircrew; Multiple entry visas are allowed for crew: seamen; Multiple entry visas are allowed for crew: truck drivers; Number of documents needed to obtain a business visa; Range of visa processing time (days); Visas on arrival or visa exemption are available for temporary entry/transit of crew; Visas on arrival or visa exemption are available for temporary entry/transit of crew: aircrew; Visas on arrival or visa exemption are available for temporary entry/transit of crew: seamen; Visas on arrival or visa exemption are available for temporary entry/transit of crew: truck drivers 46
# **1. Introduction**

China’s integration into global financial markets is important both for China and the world economy (Cerutti and Obstfeld, 2019). Before China joined the World Trade Organization (WTO) in 2001, international investors’ access to Chinese stocks was severely restricted.<sup>1</sup> After China became a WTO member, it established a Qualified Foreign Institutional Investor (QFII) program that partially allowed selected institutional investors to purchase shares issued in the Shanghai and Shenzhen stock markets.

In the post-2012 period, the internationalization process accelerated significantly as Chinese authorities steadily eased restrictions that prevented international institutional and retail investors from buying shares of Chinese firms listed in domestic markets (the so-called A shares). In 2013, the authorities relaxed restrictions on foreign institutional ownership of domestic firms. In 2014 and 2016, the Stock Connect program gave international institutional and retail investors direct access to a subset of stocks listed in Shanghai and Shenzhen, respectively, through the Hong Kong Stock Exchange. Since 2018, these connected stocks have been gradually incorporated into the Morgan Stanley Capital International (MSCI) Emerging Markets Index.

This paper studies how opening mainland China’s stock markets to foreign investors has affected Chinese firms’ equity financing and investment activities. We analyze the performance of firms between 2000 and 2020, focusing on the post-2012 internationalization period, given the number and relevance of events in those years. We conduct difference-in-differences estimations to compare firms targeted by the internationalization events with non-targeted firms. We also analyze the role of domestic and international investors in financing Chinese firms.

We construct a rich panel dataset of publicly listed firms residing and operating in mainland China, combining transaction-level equity issuances with balance sheet and income statement

> 1 Foreigners could only buy specific shares denominated in foreign currency (B shares) issued by a very limited number of firms in the mainland stock markets or invest in Chinese stocks by buying shares in Hong Kong SAR, China (H shares).

1
Policy Research Working Paper 6286

# **Abstract**

This paper presents the latest update of the World Bank Bank Regulation and Supervision Survey, and explores two questions. First, were there significant differences in regulation and supervision between crisis and noncrisis countries? Second, what aspects of regulation and supervision changed significantly during the crisis period? The paper finds significant differences between crisis and non-crisis countries in several aspects of regulation and supervision. In particular, crisis countries (a) had less stringent definitions of capital and lower actual capital ratios, (b) faced fewer restrictions on non-bank activities, (c) were less strict in the regulatory treatment of bad loans and loan losses, and (d) had weaker incentives for the private sector to monitor banks’ risks. Survey results also suggest that the overall regulatory response to the crisis has been slow, and there is room to improve regulation and supervision, as well as private incentives to monitor risk-taking. Specifically, comparing regulatory and supervisory practices before and after the global crisis, the paper finds relatively few changes: capital ratios increased (primarily among non-crisis countries), deposit insurance schemes became more generous, and some reforms were introduced in the area of bank governance and bank resolution.

This paper is a product of the Office of the Chief Economist, Finance and Private Sector Development Network; and Finance and Private Sector Development Team, Development Research Group. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at mcihak@worldbank.org, ademirguckunt@worldbank.org, mmartinezperia@worldbank.org, and amohsenicheraghl@ worldbank.org.

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even
as the Demographic and Health Surveys (DHS), though researchers have reduced under-reporting by providing special training to interviewers, placing greater emphasis on respondents’ privacy and safety, and allowing women multiple opportunities to disclose their experiences (Ellsberg et al., 2001a; Garcia Moreno et al., 2003; Ellsberg et al., forthcoming).

# **_Estimates of the magnitude of the problem_**

Population-based surveys have found that between 10-70% of women report being physically assaulted by an intimate male partner at some point in their lives (Heise, Ellsberg and Gottemoeller, 1999). See Annex A for estimates from many recent population based studies (Ellsberg et al., forthcoming). Findings from a multi-country study on domestic violence and women’s health carried out by the World Health Organization in fifteen sites and ten countries found that between 13-62% of women had experienced physical violence by a partner over the course of their lifetime, and between 3-29% of women reported violence within the past year (Figure 1.1).

**Figure 1.1.  Percentage of women who reported sexual violence by an intimate partner (ever), physical violence by an intimate partner (ever), and physical violence by an intimate partner in the past 12 months.**

<!-- Start of picture text --> 37%<br>Bangladesh (Urban) 40%<br>19%<br>50%<br>Bangladesh (Province) 16% 42%<br>10%<br>Brazil (Urban) 27%<br>8%<br>14%<br>Brazil (Province) 34%<br>13%<br>59%<br>Ethiopia (Province) 49%<br>29%<br>6%<br>Japan (Urban) 13%<br>3%<br>17%<br>Namibia (Urban) 31%<br>16% 23
pure profit shifting in the sense of wholly artificial arrangements intended to reduce the multinational group’s total tax liability. To the extent that the amount of profit shifted through such arrangements is directly affected by real production decisions, however, their impact can be captured in that framework. Suppose for instance that the affiliate in _h_ produces an intermediate input used by that in _j_ , so that _Rj_ = _r_ ( _Kj, Fh_ ) _− c.Fh_ , for some function _r_ ( _._ ), where _c_ denotes the internal transfer price. Then _∂Rj/∂Fh_ will differ from zero to the extent that the transfer price differs from the marginal product of the intermediate in its use by _j_ ; if the transfer price is set higher than that, for instance, then _∂Rj/∂Fh <_ 0.

Many other forms of profit shifting, however, are not directly related to production: debt shifting, for example, and routing through tax-favored conduit countries. The latter, as stressed above, is particularly relevant here as being a key driver of the distinction between FAI and FDI data. While FAI data looks though pure conduits to identify the ultimate parent of any affiliate in some host country, the real investment decisions of the multinational can of course nonetheless be expected to reflect its awareness of any tax savings that it can enjoy by the use of such conduits. This means that the potential use of conduits as means of tax avoidance cannot be ignored in understanding FAI data. Importantly, however, if the use of conduits is not connected to real investment decisions, then it reduces _average effective rates_ but has no effect on the _marginal_ effective rates that guide real investment decisions.

It may be, nonetheless, that real production can itself facilitate transactions-based tax avoidance, for example by meeting ‘substance’ tests required to draw on advantageous treaty provisions. To allow for this, it has become standard practice in the literature to suppose there to be some real cost associated with deploying devices of
the pandemic, although lower than what was experienced by strata 4 and 5. In Buenos Aires, while the typical person buying online is of higher income, the pandemic narrowed the existing socioeconomic gap. Consumer surveys conducted by CACE indicate that consumers who started using e-commerce with the onset of the pandemic are mostly of lower-middle or lower socio-economic status. However, the size of the gap observed in 2018 was so high that it seems unlikely to have been completely reversed. Thus, if there is a substitution effect of shopping trips as a result of e-commerce, one would expect the drop in shopping trips to be larger among residents with higher socioeconomic status. Likewise, increases in urban distribution flows of goods would be expected to be higher for movements destined for high socioeconomic residential areas.

# **6. The changing urban freight dynamics during the pandemic and potential for trip elimination**

In Bogota, total daily trips to areas associated with commercial activity – areas with shopping centers, areas near shopping centers, and areas that prior to the pandemic concentrated many shopping trips – fell more than trips to other areas in both 2020 and 2021 (Figure 4). This effect was particularly strong in the case of trips to areas with shopping centers: total trips to these areas in 2020 fell by 25.3 percent on weekdays compared to 2019 (compared to a 17.1-percent drop to other areas), by 17 percent on Saturdays (compared to 8.1 percent) and by 14.9 percent on Sundays (compared to 3 percent). The drop in mobility to commercial areas was particularly strong in the south of the city.

**_Figure 4:_** _Change in trips to areas with shopping malls and the rest of areas in 2020 and 2021 vs. 2019 (%)_

<!-- Start of picture text --> a. Bogota b. Buenos Aires<br>Workdays Saturday Sunday Workdays Saturday Sunday<br>5% 5%<br>0% 0%
Finally, a limitation of this study is that, since the VMS 2004 conducted interviews only in eleven provinces, the data should not be viewed as representing the migration patterns of Vietnam as a whole. In particular, whereas this research emphasizes differential migration patterns depending on job outcomes, it is not within the scope of this paper to analyze the relative importance of each type of migration. This paper also suggests that the impact of foreign job opportunities on internal migration must be understood in the context of the external environment. Specifically, the year 2004 and the preceding years covered by the VMS were a time when the labor demand of foreign firms expanded substantially, mainly stimulated by the U.S.-Vietnam BTA. The expansion of export-oriented and female-intensive manufacturing production in foreign firms is likely to have accelerated a migration flow of women towards the areas where foreign firms are concentrated. How negative external shocks would affect labor demand, urban unemployment, and migration patterns in a developing country is an important issue and a subject for future research.

# **References**

Asian Development Bank (ADB), 2006, _Vietnam: Poverty Assessment_ .

Athukorala, P. and T. Q. Tien, 2012, Foreign Direct Investment in Industrial Transition: the Experience of Vietnam. _Journal of the Asia Pacific Economy,_ **17** (3), pp. 446-463.

Dang, N. A., S. Goldstein and J. McNally, 1997, Internal Migration and Development in Vietnam. _International Migration Review_ , **31** (2), pp. 312-337.

Dang, N. A., C. Tacoli and X. T. Hoang, 2003, Migration in Vietnam: a Review of Information on Current Trends and Patterns, and their Policy Implications. Paper presented at the Regional Conference on Migration, Development and Pro-Poor Policy Choices in Asia, on June 22-24, 2003 in Dhaka, Bangladesh.

Davies, P. S., M. J. Greenwood and H. Li
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## CHAPTER V

# METHODOLOGY OF MATCHING PROCEDURES: THE PROBLEM _AND_ A PROPOSED SHORT CUT

The criteria for selection of the particular "representative" commodity items on which quantity and price comparisons are ultimately based is a central issue in this kind of study. This chapter describes alternative methods and the matching procedure we adopted.

# Earlier contributions

Many of the methodological problems of intercountry comparisons using the "industry-of-origin" approach were adumbrated by Rostas (1948), and more fully elaborated by Paige and Bombach (1959). Their contributions to solving problems of measurement have already been discussed in chapters I and III. They added large appendices to their studies, in which the actual calculations are presented industry by industry, and are more fully transparent than most other studies of this kind. However, with regard to the matching problem even Rostas and Paige and Bombach do not present a systematic procedure. Their presentation has an ad hoc quality, with no general presentation of the matching issue and feasible options for tackling it. In other studies dealing with international comparisons from the product side hardly any relevant information is given on how the matching problem was dealt with.

Below we develop a number of criteria for a systematic matching procedure which is also economical in terms of time and effort. It may also be helpful to national census statisticians in considering whether their existing product specifications and aggregations can be improved (within the limits of confidentiality, which in some cases is the origin of the comparability problem),

# Product Comparability

Before discussing three possible approaches to matching, we consider the general problem of "product comparability". Time series collected for index purposes (e.g. consumer price indices) for a particular country are, for the most part, based on exact matching. The statistics record, at regular intervals, the price of an identical product, sold in the same condition at the same point in the production chain. For example, food prices generally relate to particular brands of processed food, sold in specified quantities in
and discrete, rather than interval and continuous (Regressions 4 and 5) has no effect on the results which are still significant at the 1% level, and have the theoretically anticipated sign. Utilizing the pooled dataset and all possible determinants of rent extraction identified in the literature (Regression Model 6 and 7) also does not affect the results, which remain significant at the 1% level. Finally, Regression Model 8 shows the importance of the macro-level context. As both the interaction term of the EDD/NEDD ratio and a high-income and democratic context and the independent effect of both the EDD/NEDD ratio and a high-income democracy context, are all negative and significant on the level of perceived rent extraction. Furthermore, when utilizing the subsample of countries that are not high-income democracies (not shown), the EDD/NEDD ratio is positive and statistically significant. The reasons for this may be multiple (government extensiveness may be correlated with state capacity in some developing countries) and it is beyond the scope of this work to investigate. However, the fact that the effect of the EDD/NEDD ratio in high-income democracies differs from non-highincome democracies clearly demonstrates the importance of how macro-contextual and meso-contextual factors may have different interaction effects.

23
Table 6 shows the results from two estimations: one using annual data and the other using twoyear averages.<sup>7</sup> As noted earlier, the objective of using the two-year averages is to smooth out business cycle effects. Clearly, an even longer period would have been desirable from the perspective of purging business cycle effects, but limitations in terms of the number of available data points prevented us from doing so. The estimated coefficient in the multinomial regressions reflects the likelihood of being in one cluster relative to a reference cluster. As noted earlier, the reference group used is the lower growth and higher vulnerability (V) cluster, which is the worst of all possible outcomes.

**Table 6. Multinomial Logit Estimations based on Growth and Vulnerability Clusters** 1/

|||||**VUL**|**NER**|**ABILITY**||||
|---|---|---|---|---|---|---|---|---|---|
|||<br>|**Annual**<br>|**Data**<br>||**Two**<br>|**-Year**<br>|**Average**<br>|**s**<br>|
|||**Lowe**|**r**|**Highe**|**r**|**Lowe**|**r**|**High**|**er**|
|Trade openness; exports plus imports (% of GDP)||-0.024|***|||-0.022||||
|Export and import growth rates, difference in %||-0.017|||
macroeconomic growth, is most likely to happen through formally registered firms. These weaknesses in the informal sector suggest that understanding the drivers of formal firm entry and survival are key to promoting economic growth and employment.

The paper proceeds as follows. Section 2 reviews previous literature related to firm dynamics. Section 3 reviews the relevant economic and political history in Cote d'Ivoire. Section 4 presents the data set and summary statistics. Section 5 presents business dynamics, survival test methodology, and results. Section 6 concludes.

# **2. Related literature**

Empirical studies of firm dynamics overwhelmingly focus on firm behavior in the US, Canada, and other industrialized countries.<sup>5</sup> In general, these studies find that gross entry is substantial in most industries and is significantly higher than net entry due to the high death rate of infant firms (for example, see Haltiwanger, et al. 2008a).<sup>6</sup> Successful entrants grow rapidly, so that an entrant cohort's initial market share falls slowly. For instance, an early study of patterns of firm entry, growth, and exit in US manufacturing industries over the period 1963-1982 shows that there are substantial and persistent differences in entry and exit rates across industries and that industries with higher than average entry rates tend to also have higher than average exit rates (Dunne et al., 1988). The authors also find that most entrants and exiters are substantially smaller than continuing producers.

Recent cross-country studies have examined the impact of country characteristics. For example, a study of entry rates in over 100 countries finds significant relationships between entrepreneurial activity and indicators of economic and financial development and growth, the quality of the legal and regulatory environment, and governance (Klapper et al., 2010; Klapper and Love, 2011a and 2011b). The literature also considers the relationship of the legal and regulatory environment on firm entry and growth. For instance, Klapper et al. (2006) provides a comprehensive
∗_</sup> ( _I_ ; _ρ_ = 0 _._ 10), namely, Rs 20.5 million. Some help is now arguably needed from other quarters. Taking the middle of the range for _PV_<sup>_∗_</sup> ( _I_ ; _ρ_ = 0 _._ 10), the value of _B_<sup>+</sup> ( _ρ_ = 0 _._ 10) is Rs 2.71 million, so that Rs 0.43 million must be found from elsewhere. If none can be, the project will just pass at _ρ_ = 7 _._ 4 percent.

In fact, the Orissa Survey provides strong support for the contention that the benefits in the domains of education and health are even more substantial relative to the ‘commercial’ ones. The respondents in those villages that had received an all-weather road – by December 2009 were asked to rank the three domains commercial, education and – health according to the size of the corresponding benefits they had enjoyed from the new road thus far. The commercial and health domains were roughly equally ranked (with 31 and 29 first, and 23 and 28 second ranks, respectively), whereas education lagged far behind (Bell and van Dillen, 2012). It is possible that the latter reflects the fact that 28 of the 30 villages have their own primary school, but only two have a secondary school, whereby these poor families may place little value on secondary education. The respondents were also asked to rank the benefits stemming from the commercial domain against those from education and health combined: 24 ranked the former first, 18 put them on a par, 28 ranked the latter first, and one expressed no opinion. These rankings suggest that in the respondents’ eyes, the benefits in the domains of education and health are roughly as large as those in the commercial domain, which are much more readily measurable to outsiders. These self-reported assessments 21
2

# **Development Expenditures and The Local Financing Constraint**<sup>**1**</sup>

Inadequacy of local financing has been a major development financing problem in most low income economies, and is cited as a major factor undercutting aid absorption and "sustainability" of development projects. When inadequate local financing limits project implementation and effective aid absorption, it means that local currency funds are more valuable than project aid at the margin. Allocating local funds to leverage project aid resources becomes critical for aid productivity. Project screening and reviews of development expenditure programs need to pay as much attention to assessing the quality of projects financed fully by local funds, as those which are aided. Resource shifts from fully locally-funded projects that enhance the overall quality of public investments should be emphasized.

A fiscal adjustment program focused on matching aggregate resources against aggregate expenditures, while glossing inner local financing imbalances, stands to undercut the execution of the development expenditure program and to frustrate observance of other fiscal and financial benchmarks. A feasible program has to face the local gap directly by matching planned local fund spending against expected local fund receipts, and ensuring that planned development expenditures have adequate matching funds. Improving the local financing data base will help to develop indicators to monitor budgeting for and using local funds efficiently. Since economic growth provides scope to mobilize local funds by expanding the base for tax revenues, seigniorage and domestic borrowing, fiscal reforms need to protect high quality expenditure programs that expand the base for growth.

# **_I._** _The_ **_Importance_** _of_ **_Local Funds_**

1. For most low income economies, while external aid is instrumental for having access to capital for investment and growth, local funds are indispensable for facilitating the absorption of the aid and for ensuring that it is utilized productively. Yet, the inadequacy of local financing has been a major development financing problem over the past decades.2 Inadequate local financing has been an important factor, though not the only one,