rafmacalaba/datause-encoder-data huggingface dataset:
Achieving regional liberalization of services markets is difficult. The experience of the EU – by far the deepest regional initiative to date – is illustrative. To a large extent the 1992 Single market initiative revolved around actions aimed at integrating services markets. Numerous papers have documented how national regulatory regimes continue to segment EU services markets. For example, Maijoor, Buijink, Meuwissen and Van Witteloostuijn (1998) note how differences between national auditing regulations limit intra-EU trade in audit services, whether through cross-border establishment of auditors, cross-border provision of audit services; or cross-border control of an audit firm. All these types of trade are affected by regulations defining qualifications, competition between auditors or audit firms, and the control of such firms, with the latter types of regulatory barriers being the most important barrier to trade. That said, progress in other regional agreements is much less than in the EU. Park (2002), for example, employs a cross-section gravity analysis of services trade flows and finds that the EU is the only RIA where intra-RIA (bilateral) trade is more than predicted. For other Agreements such as Mercosur, NAFTA, and the Andean pact, trade in services is less than what would be predicted. But even in the EU there is still much scope for further liberalization of trade in services.<sup>59</sup> Langhammer (2005) documents one dimension of this – the EU is still not a customs union when it comes to services policies. Indeed, it is not even a free trade area. Langhammer uses the EU’s GATS commitments and the offers the EU put on the table in the Doha Round to assess the extent to which there are still differences between national trade and investment regimes across service sectors. These are found to be significant, although full implementation of the EU offer would move the Community closer towards achievement of the customs union objective.

Kox and Lejour (2006) analyze the impact of policy heterogeneity inside the EU in creating trade and investment costs for service firms doing business in other countries. Service providers have to comply with different rules in each foreign market where they operate. Complying with these regulations causes fixed market-entry costs, specific for each export market. They develop an indicator for bilateral policy heterogeneity – based on the OECD dataset reported in Nicoletti (2001) and Nicoletti and Scarpa (2003) – which is used

> 59 This is also the conclusion of Lejour and Palma Verheijden (2004) who compare the intensity of intra-EU trade in services with that observed in Canada and find that trade in the latter is two times higher as a share of GDP than in the former. The policies that can help explain these results are discussed in Commission of the European Communities (2002).

46
The data come from several sources. For financial variables, we use Lane and Ferretti (2007, updated in 2015). For the share of credit to the private sector, we use data from the World Development Indicators. For the exchange rate regime (Eichengreen et al., 2013), we use data from the International Monetary Fund’s Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER), which reports countries’ self-reported exchange rate regimes. The existence of an SWF was constructed using different websites of SWF (see Appendix A).

# **5. Empirical Findings**

We used the Lane and Ferretti (2007) data set, which was updated to include data covering the period 1970–2015. We ran a compendium of regressions, including various components of the NFA—including the capital account, FDI, portfolio assets and liabilities, external debt, international reserves, and total foreign assets—as dependent variables.

We first present the results on assets (with a focus on oil-exporting countries). We then report the results on liabilities (with a focus on oil-importing countries). We then report aggregates of the balance of payments, especially the capital account and reserves, for both oil-exporting and oil-importing countries.

Table 3 shows the basic specification for assets. The SWF variable is statistically significant and positively associated with FDI (Reddy, 2019); it does not seem to matter for other assets (portfolio and debt). This finding shows the extent to which an SWF can help improve the allocation of investment assets toward FDI rather than portfolio investments. Financial development (defined as credit to the private sector as a percent of GDP) is also statistically significant for all asset components, with the highest elasticity for portfolio investments. This result is highlighted by Vermeulen and de Haan (2014), who show that financially developed countries are likely to take more risks than developing countries, because development allows them to insure against risk. For this reason, financially developed countries tend to invest more in portfolio investments than in FDI or debt.

13
for firms that have initial _importing_ relationships with the relevant _source_ country, and initial importing relationships are correlated with initial exporting relationships, then the IV exclusion restriction for a model of the form of (1) will be violated. This concern has not always been taken into account in the literature using exchange rates as instruments for exports. To absorb these direct effects, we construct interactions of the relative price levels with indicators for whether a firm has positive imports from a particular source country, _rpljt · Dij,_ 1997, where _Dij,_ 1997 = 1 if firm _i_ has positive imports from country _j_ in 1997, and equals zero otherwise. We include these relative price level/initial importer interactions directly as covariates in the main outcome equation. Thus our main estimating equation is: where _incit_ is instrumented by the terms _rpljt ∗ Cij,_ 1997. In the cases of firms that initially import from and export to the same set of countries, the effect of the relative-price-level movements will be captured by the relative price level/importer interactions. The coefficient on average destination income will be identified by differences between the initial sets of import sources and export destinations, and the differential response to relative price level movements that result from them.

In constructing the average destination income (and average destination distance), we calculate a weighted average over all destinations, including the domestic market, using sales to the destination as weights.<sup>17</sup> However, in our baseline specification we drop some destinations from the instrument set. Portugal is a member of the Euro-zone, and since 1999 has shared the Euro with a number of its main trading partners. For these partners, the only changes in the relative price level over the 1999-2005 period were due to differential rates of inflation. One might worry that omitted variables such as firm-level productivity shocks in Portuguese firms might contribute to inflation rates in the Euro-zone. For this reason, in our baseline specification we omit the Eurozone states from our set of instruments (as well as from the set of relative price level/importer interactions). The qualitative results are not affected when we include the Euro-zone countries in the instrument set. We also limit the number of countries in the instrument set to 100, by descending order of export share. The qualitative results are robust to including 50, 75 or 125

> (forthcoming).

> 17Domestic sales are not observed in the customs data, but we observe domestic sales, as well as domestic purchases, in the IAPI data.

10
Second, the time frame captured in this study is very small, only two years of SBM preparation and implementation. In order to fully assess the impact of SBM, the assumptions regarding how the reforms play out over time and eventually affect student achievement will need to be articulated and examined explicitly. The possibility of a “hawthorne” effect cannot be eliminated, and, potentially, an evaluation with a longer time-frame would permit the identification of longer-term effects. Behrman and King (2008) highlight the risks of a poorly timed evaluation, ranging from finding partial or no impacts, when they in fact would take a longer time to materialize, to the risk of scaling up a poor program, by waiting too long to evaluate. Articulating clear assumptions regarding the reforms would assist with implementing evaluations in a timely fashion.

Third, the study does not examine the processes through which SBM affected school performance. Barrera-Osorio et al.’s (2009) review of the SBM literature conceptualizes the range of SBM approaches along two dimensions: _who_ has the power to make decisions and the _degree_ of decision-making devolved to the school level. The review notes that “With so many possible combinations of these two dimensions, almost every SBM reform is unique.” (pg. 4). While some programs transfer authority to principals or teachers only, others encourage or mandate parental and community participation, often through school committees. Furthermore, the contexts in which the authority is devolved are likely to play a role in the eventual effects. For example, engaging parents and the wider community in school matters may not be easy in certain contexts – studies indicate that in communities with social and political tensions, the school board may be used as an instrument by the elite to orchestrate greater inequities.<sup>19</sup> Evidence from New Zealand and Australia demonstrates the under-representation of minority groups in the composition of school boards<sup>20</sup> .

Several previous papers have examined some components of, and the processes through which, SBM affects student achievement. For example, Jimenez and Sawada (1998) examined 1996 data on Community Managed Schools (EDUCO), a program created to expand coverage in rural El Salvador, where communities received significant authority over schools, including in financial and staffing areas. They found that enhanced community and parental involvement in EDUCO schools improved students' language skills and diminished student absences, which may have long-term effects on achievement. Sawada and Ragatz (2005) also evaluated the EDUCO program and found that EDUCO transferred few administrative processes to local levels but gave local actors greater perceived influence in hiring and firing teachers. Gunnarsson et al.’s (2004) model of education decentralization suggests that principals,

> 19 Caldwell, 2005.

> 20 Ibid.

15
|Race|||||||
|---|---|---|---|---|---|---|
|(reference - white):|||||||
|Black and Indigenous|0.0545|0.0635|0.0586|0.0614|0.0623|0.0662|
||(0.0009)|(0.0013)|(0.0009)|(0.0012)|(0.0009)|(0.0012)|
|Mixed Race|0.4168|0.4000|0.4059|0.3821|0.4096|0.3819|
||(0.0019)|(0.0026)|(0.0019)|(0.0025)|(0.0018)|(0.0023)|
|Industry|||||||
|(reference - agriculture):|||||||
|Manufacturing|0.1690|0.1141|0.1611|0.1077|0.1470|0.0928|
||(0.0015)|(0.0017)|(0.0014)|(0.0016)|(0.0013)|(0.0013)|
|Construction|0.1077|0.0061|0.1142|0.0046|0.1288|0.0071|
||(0.0012)|(0.0004)|(0.0012)|(0.0003)|(0.0015)|(0.0004)|
|Other Secondary|0.0291|0.0066|0.0238|0.0077|0.0196|0.0068|
||(0.0007)|(0.0004)|(0.0006)|(0.0004)|(0.0005)|(0.0004)|
|Retail|0.1252|0.1278|0.1363|0.1335|0.1418|0.1492|
||(0.0013)|(0.0018)|(0.0013)|(0.0017)|(0.0013)|(0.0017)|
|Services|0.1044|0.3319|0.1217|0.3462|0.1372|0.3526|
||(0.0012)|(0.0025)|(0.0013)|(0.0024)|(0.0013)|(0.0022)|
|Financial|0.0378|0.0339|0.0373|0.0316|0.0495|0.0412|
||(0.0007)|(0.0010)|(0.0007)|(0.0009)|(0.0008)|(0.0009)|
|Transport/|0.0639|0.0108|0.0650|0.0110|0.0700|0.0125|
|Communications|(0.0009)|(0.0006)|(0.0009)|(0.0005)|(0.0009)|(0.0005)|
|Social Services|0.0413|0.2296|0.0409|0.2270|0.0482|0.2294|
||(0.0008)|(0.0022)|(0.0008)|(0.0021)|(0.0008)|(0.0020)|
|Government|0.0703|0.0540|0.0672|0.0560|0.0642|0.0540|
||(0.0010)|(0.0038)|(0.0009)|(0.0012)|(0.0009)|(0.0005)|
|No Signed Labour Card|0.2396|0.2991|0.2074|0.2730|0.2198|0.2883|
||(0.0017)|(0.0033)|(0.0015)|(0.0023)|(0.0015)|(0.0021)|

Source: computed from PNAD 1988, 1992 and 1998. Standard deviations of the dummy variables are standard deviations of a proportion.

21
**Figure 3: External Finance Need of Exports and Trade Openness, 1995-99.**

<!-- Start of picture text --> MLT<br>PHL MYS<br>SGP<br>JPN CHE DJI<br>USA BDIRWA GBRMEXKORSWEISR TWNTHAGMB IRL HKG<br>BRA ARG INDSDNBGDPERCUBUGACOLIRNHTIPAKCHNETHURYAUSNERBFAGTMSLECAFEGYGINGRCMOZVENCMRFRAZAFALBBOLITATURTCDTZAESPMDGBENDZAGNBPOLMARECUCHLNPLNZLMLISLVROMLBN OMNLAOKENIDNDOMSYRBHSDNKPRTQATFINBMUNORSENGHAYEMISLTGOKHM SAU CANNGALKAPANCIVPRYAUTTUNMNGHUNVNMGABCRIKWTMRTPNGHNDCYPTTOBGRBLZJAMNLDNICBRBJORKNAFJICOGMUSAGOBELSYC BHRGUYGNQ<br>ZMB<br>ZWE<br>MWI<br>3 4 5 6<br>Log of Trade/GDP, 1995-9<br>Figure 4: Financial Development and External Finance Need of Exports, 1995-99.<br>CHE<br>JPN<br>USA<br>NLD<br>HKG<br>THA<br>KOR MYS<br>ZAF FRAGBRSWE SGP<br>NZL<br>CHNAUT<br>NORPAN<br>AUSJORPRTESPCANBEL IRLISR<br>KWTBHRCHLEGYITTO S TUNLBOL AU MAR IDN ITAFINDNK PHL<br>MWI ZWE ZMBDZABGDLKANGAUGAGTMHTIVENNICHNDPESYRMDGSLVPNGSDNPAKKENSENI BFA CMRPRYROM R NPLJAMURYDOMECUETHARGGRCNCIVTGOGHATURBRACOLGABINDNERPOLCOGCRI CAFHUNSLEGMBRWAMEXBDI<br>-50 0 50 100<br>Financial Content of Exports, 1995-9<br>100<br>50<br>0<br>Financial Content of Exports, 1995-9<br>-50<br>200<br>100<br>0<br>Private Credit/GDP, 1995-9<br>-100<br><!-- End of picture text -->

**Figure 4: Financial Development and External Finance Need of Exports, 1995-99.**

25
**Figure 6. Investor confidence and local capital market valuation 1/**

<!-- Start of picture text --> No. of countries<br>60 0.8<br>50<br>0.6<br>Developing countries<br>40 High income non OECD countries<br>High income OECD countries 0.4<br>30<br>0.2<br>20<br>Correlation coefficient<br>(RHS) 2/ 0.0<br>10<br>0 -0.2<br>Jan 2004 - May 2007 Jun 2007 - March 2009<br>No. of countries<br>60 0.6<br>50 0.5<br>40 0.4<br>Developing countries<br>High income non OECD countries<br>30 High income OECD countries 0.3<br>20 0.2<br>Correlation<br>coefficient (RHS) 2/<br>10 0.1<br>0 0.0<br>Jan 2004 - May 2007 Jun 2007 - March 2009<br><!-- End of picture text --> 1/ No. of countries with correlation between the y/y changes of the State Street investor confidence index and country US$ MSCI greater than 0.5 (out of 77 countries with available data) 2/ Correlation coefficient between the y/y changes of the State Street investor confidence index and world US$ MSCI

# **VI. The Relationship between Investor and Consumer Confidence**

Our indicators of market volatility, macro environment and equity market performance are also significantly related to an indicator of consumer confidence— the common factor across consumer confidence indices in the United States, United Kingdom, Canada, Germany and Japan (Table 5). An alternate indicator measuring investor risk appetite, namely the State Street Advisors’ measure of institutional investor holdings of risky versus other assets, is also correlated with the consumer confidence factor (more so during bad times) but does not perform as well in regressions. Risk appetite declined 13
of maize (depending on the extent<sup>to which otherfeedgrainsthatare not TRQ-restricted,such as</sup> barley, are substitutable for maize).<sup>Nationaleconomicwelfarewouldbeonly veryslightly</sup> greater in this case as compared<sup>with the corescenario(see bottom row of Table10).</sup> _Alternative scenario 2: removing_<sup>_negative agricultural protection_</sup> If the negative NRPs for rice,<sup>meats, vegetablesandfruits wereto be raisedto zero,the income</sup> distributional effects would<sup>gointheoppositedirectiontothoseinthepreviousalternative</sup> scenario (less inequality between<sup>farm andnon-farmhouseholds).Thechangesarenotgreat</sup> though, even though these products<sup>accountfornearly40 percentofthevalueoffoodand</sup> agricultural output in China.<sup>Ascan be seen by comparingcolumns1, 2and 3 of Table10,they</sup> would involve about as much<sup>improvementinincome distributionasthepreviousalternative</sup> scenario would worsen it. This<sup>caseinvolvesa 3 percentlargernationaleconomicwelfaregain</sup> than the core case (bottom row of<sup>Table10).</sup> _Alternative scenario 3: removing_<sup>_the wedge between farm and non-farnwages_</sup> If one expected all off-farm migrants<sup>to go to</sup><sup>_rural_rather than urbannon-farm jobs, andif those</sup> migrants were just as adept at<sup>suchnon-farm work(e.g.,becausetheyareyoung or evenjust</sup> school-leavers and hence no different<sup>from other new entrantsto unskilled ruralnon-farmwork),</sup> the assumption above of a one-third<sup>wedge betweenfarm and non-farmwagesfor the unskilled</sup> could be dropped.'<sup>3</sup> Rerunning<sup>the modelwithoutthat assumed wedge has significantimpacts on</sup> the estimated number of farm<sup>workersmovingtonon-farmemploymentandon theindustry</sup> composition of China's economy.<sup>Approximately28 millionpeople would leave their farm jobs as</sup> a result of accession if that<sup>barriertofarm out-migration wasremoved,compared withthe</sup> estimated 6 or 7 million people<sup>mentioned abovewhen the</sup><sup>_hukou_system remains in place.</sup> The impact on industry composition<sup>of removingthat labor marketdistortionissubstantial'.</sup> WTO accession will have a much<sup>strongerpositiveimpact on China's manufacturingandservice</sup> sectors if the _hukou_ system is<sup>abolished.Thiswillallowmore productionof metals,automobiles</sup> and electronic equipment, and<sup>moreservices.Thatis possiblein thisscenariobecausefactor usein</sup> farming and hence agricultural<sup>outputareless,whichalsomeansmoreimportsoffoodand</sup> agricultural products are needed<sup>($10.2 billion by 2007instead of the $3.96in the core scenario).</sup>

> 3 Evidence of increased flexibility<sup>in China'slabor markets in recent times is presentedin Lohmar(2001).</sup>

14
**Chart 8. Central Bank bills rate and transactions with banks on the foreign exchange market**

Source: NBRM The process of monetary policy relaxation continued in 2010. The NBRM’s main interest rate in this period was reduced seven times, thus bringing it to a historically low level of 4 percent in December 2010. The accommodative monetary policy stance in this period arose from the improvements in the macroeconomic environment. In 2010, there was a gradual recovery of economic activity. The current account deficit in 2010 was 2.8 percent of GDP, which represented a significant downward change for two years in a row. Although the capital inflows during 2010 were relatively lower than the year before, considering the low current deficit they were sufficient to enable further increases in the foreign exchange reserves. At the end of 2010 at a level of 1.715 million euros, the foreign reserves exceeded the pre-crisis level (Chart 9), and at the same time covering around four months of goods and services for the next year.

**Chart 9. Gross foreign exchange reserves**

<!-- Start of picture text --> 2,000.0<br>in million euro<br>1,800.0 1,689 1,715<br>1,600.0<br>1,400.0<br>1,200.0<br>1,000.0<br>800.0<br>600.0<br>400.0<br>200.0<br>0.0<br>2007/01 2007/03 2007/05 2007/07 2007/09 2007/11 2008/01 2008/03 2008/05 2008/07 2008/09 2008/11 2009/01 2009/03 2009/05 2009/07 2009/09 2009/11 2010/01 2010/03 2010/05 2010/07 2010/09 2010/11<br><!-- End of picture text --> Source: NBRM 12
- 25 -

contribute to tax losses through enhanced opportunities for tax planning or for ether means to reduce or escape taxes by firms. The literature, as on the above discussion, provides us with preciously little guidance on these matters.

# b. Avoidance and Evasion

A compliance problem arises, generally, in the tax treatment of losses. In order to maintain neutrality, it is argued, tax losses should be fully refundable, granting the firm a credit or its present-value equivalent against them. In this manner risky assets are not penalized, and refundability of tax losses becomes an implicit deduction for risk, with losses and gains being fully shared by the government.

Refundability is accomplished by giving a refundable tax credit to the firm, or carrying forward losses at a rate of interest. And if the firm is liquidated, any tax credit owed to it should in turn be paid. This applies both to equity-income and to cash-flow taxes. But tax losses are, in principle, more likely with the cash-flow base, where taxes due will typically be negative while the firm is growing and investment is expensed. The tax revenues owed by the firm may thus be uneven, as was noted earlier. This depends on the type of cash flow tax that is instituted. With the "R+F" base of the Meade Report, the tax may fluctuate less. And if the modified method of cash-flow taxation is used, whereby costs are depreciated, not fully expensed, with the undepreciated value of the base indexed by the rate of interest, the tax base need not be negative at all. But under the simpler--and easiest to run--basic definition of the cashflow, important tax losses will normally occur in the early years of an investment.
case that a strong concentration of research and development often occurs in large metropolitan areas.

These location patterns for innovative activity are consistent with the notion that cities have a positive effect on innovation, just like they have on wages. More direct evidence can be found in Feldman and Audretsch (1999) and Carlino, Chatterjee, and Hunt (2007). To measure innovation, Feldman and Audretsch (1999) count all new product innovations in US metropolitan areas for a broad set of technologies and sectors in 1982. They find no evidence of urban scale effects but find that same-sector specialization is strongly negatively associated with innovation, whereas a diversity of employment in technologically related industries is strongly positively associated with innovation, as originally suggested by Jacobs (1969). They also find strong positive innovation effects associated with the presence of smaller establishments.

Using the number of patents par capita as the dependent variable, Carlino et al _._ (2007) find evidence of strong agglomeration effects for innovative activity. Their estimate of the elasticity of patenting per capita with respect to employment density is approximately 0.2. This is several times the estimates reported above for the corresponding elasticity of wages.<sup>15</sup> Although patenting may be argued to be a poor proxy for innovation, Carlino and Hunt (2009) confirm these results when patents are weighted by their number of citations. Thus, larger cities innovate more on a per capita basis, and these innovations are no less influential than are those developed in smaller cities.

Although this evidence is highly suggestive that cities affect innovation, there is, to the best of my knowledge, no work that focuses on the effects of innovative activity on cities, such as the effects of local innovation on urban population growth. Regressing urban population 20