Economic Growth and Infrastructure Gap in Latin America

This paper analyses the recent trends in infrastructures of Latin American, with the aim of addressing the problem of measuring and evaluating the infrastructural gap. Departing from the recent literature on economic growth and public finance, we defined the infrastructure need of a country through a model of demand. The use of a large dataset (121 countries spanned over 1960-1999) made it possible to estimate the optimal level of infrastructure provision. To conclude, a comparative inter-regional analysis of the infrastructural gap between the Latin American, East Asian, OECD and middle income countries was conducted to check if the reduction in infrastructural investment was caused by the evolution of infrastructure needs, or if it was due to a widespread inefficiency caused by the underestimation of actual needs.

Happy voters

In this paper we investigate whether or not recent initiatives taken by governments and international organizations to come up with indicators of Subjective Well Being (SWB) to inform policy makers go in the same direction as citizens expectations on what policy makers should do. We test retrospective voting hypotheses by using standard measures of SWB as a proxy for utility instead of the commonly used indicators of economic and financial circumstances. Using the British Household Panel Survey Data we find that citizens who are satisfied with their life are more likely to cast their vote in favour of the ruling party, even taking into account ideological preferences. We show that SWB influences voting decision even when the event affecting the SWB is beyond the government’s control, like the spouse death

Individual Welfare and Subjective Well-Being : Commentary Inspired by Sacks, Stevenson and Wolfers

Sacks, Stevenson and Wolfers (2010) question earlier results like Easterlin's showing that long-run economic growth often fails to improve individuals'average reports of their own subjective well-being (SWB). We use World Values Survey data to establish that the proportion of individuals reporting happiness level h, and whose income falls below any xed threshold, always diminishes as h increases. The implied positive association between income and reported happiness suggests that it is possible in principle to construct multi-dimensional summary statistics based on reported SWB that could be used to evaluate economic policy

The Role of Toeholds and Capital Gains Taxes for Corporate Acquisition Strategies

Ownership takeovers often follow complex strategies where the control of the target firm is acquired through a sequence of independent contracts. Based on this observation, we develop a novel theoretical model wherein the acquiring firm decides on the number of steps towards the full ownership of the target (the acquisition structure) and on the combination of cash and stock used to finance the takeover (the method of payment). Within this framework, we analyze the effect of the capital gains tax on these two decision margins and test our theoretical prediction using a bivariate probit model on a sample of acquisition contracts between 2002 and 2014, collected from Bureau van Dijk's Zephyr database. Our estimates confirm the lock-in-effect and indicate a larger discouraging effect of rising capital gains taxes (+10%-points increase) on one-shot full acquisition (-6.0%-points) versus on sequential acquisitions (-5.2%-points). Further, we provide evidence that an increase in the capital gains tax (+10%-points) raises the probability of choosing one-shot full acquisition (+5.5%-points) instead of sequential acquisitions

Is it Luring Innovations or just Profit? The Case of European Patent Boxes

The effectiveness of European patent boxes in triggering R\&D and fostering new patentable innovations is the subject of a growing debate. These regimes are considered liable of tax-favouring already successful ideas, without imposing a nexus between the final location of the intellectual property (IP) and its related innovation. This paper brings the debate forward onto the assessment of the quantitative impact of patent box regimes on profit shifting by multinational firms. Our empirical strategy builds on a difference-in-difference model comparing the pre-tax profit of European subsidiaries affiliated to firm conglomerates that owned patents long before the introduction of IP boxes, to that of European subsidiaries affiliated to firm conglomerates with no historical record of patent ownership. We find that European subsidiaries affiliated to foreign IP owners report, after the introduction of a local patent box, on average 2.5 to 3.9 percent higher profit compared to European subsidiaries affiliated to non-IP-owning conglomerates. For countries where the patent box regime incorporates a nexus clause, i.e. grants the IP related tax benefit only to newly created IP, we find no significant difference in the profits of the two groups

Taxes and the location of targets

We use firm-level data to investigate the impact of taxes on the international location of targets in M&A allowing for heterogeneous responses by companies. The statutory tax rate in the target country is found to have a negative impact on the probability of an acquisition in that country. In addition, the estimated size of the effect is found to depend on whether (i) acquirer is a domestic or a multinational enterprise; (ii) the acquisition is domestic or cross-border; and (iii) the acquirer's country has a worldwide or territorial tax system

The Role of Toeholds and Capital Gain Taxes for Corporate Acquisition Strategies

Ownership takeovers often follow complex strategies where the control of the target firm is acquired through a sequence of independent contracts. We study the role of capital gain taxes on the contract structure and on the method of finance of merger and acquisitions (M&As). We find that capital gain taxes discourage cash-to-stock transactions and that this effect is stronger in sequential acquisitions. In addition, we show that capital gain taxes promote sequential acquisitions and thus carry a beneficial welfare effect by avoiding the waste of productive resources due to unprofitable mergers. We provide empirical support for the model predictions by estimating a bivariate probit on a sample of acquisition contracts collected from the Thomson Financial SDC database

David Cameron should pay attention to the “Happiness” of British citizens; it will help him win the next general election

Liberini Proto RedoanoResearch by Federica Liberini, Eugenio Proto and Michela Redoano finds that Subjective Wellbeing (or ‘happiness’) measures have a good explanatory power in predicting voting behavior/ They also show that voters are not able to separate the source/cause of their wellbeing when they decide whom to vote for. Their results imply that governments should produce better and more comprehensive measures for wellbeing, and they highlight citizens’ inability to correctly blame or reward policy makers only for the actions they are responsible for

Politics in the Facebook era : evidence from the 2016 US presidential elections

Social media enable politicians to personalize their campaigns and target voters who may be decisive for the outcome of elections. We assess the effects of such political "micro-targeting" by exploiting variation in daily advertising prices on Facebook, collected during the course of the 2016 U.S. presidential campaign. We analyze the variation of prices across political ideologies and propose a measure for the intensity of online political campaigns. Combining this measure with information from the ANES electoral survey, we address two fundamental questions: (i) To what extent did political campaigns use social media to micro-target voters? (ii) How large was the effect, if any, on voters who were heavily exposed to campaigning on social media? We find that online political campaigns targeted on users' gender, geographic location, and political ideology had a signicant eect in persuading undecided voters to support Mr Trump, and in persuading Republican supporters to turn out on polling day. Moreover the effect of micro-targeting on Facebook was strongest among users without university or college-level education

Development of an innovative method to predict and to characterize the performances of Ti-6Al-4V LBW joints

Every manufacturing process leaves on the surface of the piece a typical "technology signature". In particular, the laser welding leaves a feature at the edge of the weld bead called "undercut". In this work an experimental campaign has been conducted on Ti6Al4V butt joints. In particular a Central Composite Design (CCD) with the central point repeated three times has been investigated. In the CCD there are two factors (power and speed of the fiber laser) and five levels for each factor. This paper deals with the investigation about the correlation between the severity of the undercut and the process parameters of the laser welding. In particular, through the confocal microscopy, the original geometry of the joint was accurately acquired and rebuilt in order to make a FEM model and simulate the mechanical behavior using Ansys14.5. Moreover, response surfaces and level curves were carried out to understand and predict the depth and the width of the undercut starting from the power and the speed of the laser. At last a mathematic and geometry regression was performed in order to find a unique conical curve that interpolates all the different undercuts and that varies its parameters according to the process parameters. It is established that the process with higher speed minimizes and optimizes the undercut in the joints