The Tax Sensitivity of Foreign Direct Investment: Evidence from Firm-Level Panel Data

Understanding the determinants of foreign direct investment (FDI) is important for analyzing capital flows and the industrial organization of multinational firms. Most empirical studies of FDI, however, have focused on case studies of nontax factors in overseas investment decisions or on discerning reduced-form relationships between some measure of FDI and variables relating to nontax and tax aspects of the investment decision. In this paper, we examine the effects of taxation on FDI using previously unexplored (for this purpose) panel data on FDI by subsidiaries of U.S. multinational firms collected by Compustat's geographic segment file project. These firm- level data contain information on new capital investment overseas which enable us to measure tax influences on FDI more precisely and allow us to focus on structural models of subsidiaries' investment decision. Our empirical results cast significant doubt on the simplest notion that 'taxes don't matter' for U.S. firms' FDI decisions. Tax parameters influence FDI in precisely the way indicated by neoclassical models. Our results also lend support to the application of the 'tax capitalization' model to the study of dividend repatriation and foreign direct investment decisions.

Accounting Standards, Information Flow, and Firm Investment Behavior

We present a description of two different accounting regimes that govern reporting practice in most developed countries. 'One-book' countries, e.g. Germany, use their tax books as the basis for financial reporting and 'two-book' countries, e.g. the United States, keep the books largely separate. We derive a structural model and formalize a testable implication of our discussion: firms in one-book countries may be reluctant to claim some tax benefits if reductions in taxable income may be misinterpreted by financial market participants as signals of lower profitability. Econometric estimates suggest that accounting regime differences play an important role in describing domestic investment patterns both within and across countries.

Tax Reforms and Investment: A Cross-Country Comparison

We use firm-level panel data to explore the extent to which fixed investment responds to tax reforms in 14 OECD countries. Previous studies have often found that investment does not respond to changes in the marginal cost of investment. We identify some of the factors responsible for this finding and employ an estimation procedure that sidesteps the most important of them. In so doing, we find evidence of statistically and economically significant investment responses to tax changes in 12 of the 14 countries.

Metabolic remodeling of white adipose tissue in obesity

Adipose tissue metabolism is a critical regulator of adiposity and whole body energy expenditure; however, metabolic changes that occur in white adipose tissue (WAT) with obesity remain unclear. The purpose of this study was to understand the metabolic and bioenergetic changes occurring in WAT with obesity. Wild-type (C57BL/6J) mice fed a high-fat diet (HFD) showed significant increases in whole body adiposity, had significantly lower V̇o2, V̇co2, and respiratory exchange ratios, and demonstrated worsened glucose and insulin tolerance compared with low-fat-fed mice. Metabolomic analysis of WAT showed marked changes in lipid, amino acid, carbohydrate, nucleotide, and energy metabolism. Tissue levels of succinate and malate were elevated, and metabolites that could enter the Krebs cycle via anaplerosis were mostly diminished in high-fat-fed mice, suggesting altered mitochondrial metabolism. Despite no change in basal oxygen consumption or mitochondrial DNA abundance, citrate synthase activity was decreased by more than 50%, and responses to FCCP were increased in WAT from mice fed a high-fat diet. Moreover, Pgc1a was downregulated and Cox7a1 upregulated after 6 wk of HFD. After 12 wk of high-fat diet, the abundance of several proteins in the mitochondrial respiratory chain or matrix was diminished. These changes were accompanied by increased Parkin and Pink1, decreased p62 and LC3-I, and ultrastructural changes suggestive of autophagy and mitochondrial remodeling. These studies demonstrate coordinated restructuring of metabolism and autophagy that could contribute to the hypertrophy and whitening of adipose tissue in obesity

Room temperature coherent control of coupled single spins in solid

Coherent coupling between single quantum objects is at the heart of modern quantum physics. When coupling is strong enough to prevail over decoherence, it can be used for the engineering of correlated quantum states. Especially for solid-state systems, control of quantum correlations has attracted widespread attention because of applications in quantum computing. Such coherent coupling has been demonstrated in a variety of systems at low temperature1, 2. Of all quantum systems, spins are potentially the most important, because they offer very long phase memories, sometimes even at room temperature. Although precise control of spins is well established in conventional magnetic resonance3, 4, existing techniques usually do not allow the readout of single spins because of limited sensitivity. In this paper, we explore dipolar magnetic coupling between two single defects in diamond (nitrogen-vacancy and nitrogen) using optical readout of the single nitrogen-vacancy spin states. Long phase memory combined with a defect separation of a few lattice spacings allow us to explore the strong magnetic coupling regime. As the two-defect system was well-isolated from other defects, the long phase memory times of the single spins was not diminished, despite the fact that dipolar interactions are usually seen as undesirable sources of decoherence. A coherent superposition of spin pair quantum states was achieved. The dipolar coupling was used to transfer spin polarisation from a nitrogen-vacancy centre spin to a nitrogen spin, with optical pumping of a nitrogen-vacancy centre leading to efficient initialisation. At the level anticrossing efficient nuclear spin polarisation was achieved. Our results demonstrate an important step towards controlled spin coupling and multi-particle entanglement in the solid state