Taxes do Affect Corporate Financing Decisions: The Case of Belgian ACE

In this paper, I use difference-in-differences regressions to measure how the debt tax shield affects the capital structure of a company. By comparing the financial leverage of treatment and control companies before and after the introduction of an equity tax shield, I infer the impact of the tax discrimination between debt and equity. Consistent with the theoretical prediction, the estimated results show that the introduction of an equity tax shield has a significant negative effect on the financial leverage of a company. This effect amounts to approximately 2-7%, meaning that a classical tax system encourages companies to use on average 2-7% more debt than when there is an equal tax treatment of debt and equity.allowance for corporate equity, corporate financing decisions

More than an add-on? The Europeanization of the Dutch civil service

[From the introduction]. European integration does not stop to fascinate political scientists. Many of us are excited about this institution that transcends national interests, overcomes collective action problems, and presents member states with such a durable and authoritative framework that they slowly but unrecognizably loose authority to model their own policies as desired. But does it? Despite our excitement, many of us have troubles escaping the reflexes caused by the years of international relations hegemony in studying the EU. Does the EU really have the clout to force member states to adopt unwanted policies? Then how about the never-ending stories about non-compliance, the European Commission’s hesitance in adopting a tough stance on reluctant member states, the difficulties of monitoring actual application and enforcement on the ground? The tension between member state dominance and supranational control continues to offer a well of fascinating research topics. In order to demonstrate the success of the EU in transcending member states’ institutions and policies, or even the domestic interests underlying them, we are advised to answer at least three questions. First, we should answer the question of the extent to which Europe matters for the member states. Because even if we can identify compliance by initially reluctant member states, this may not be very meaningful if the EU’s share in national matters is only minimal. Even though interesting from a theoretical viewpoint, the societal relevance of massive research attempts to explain the fate of EU intervention in member states is slight when it affects only a minimal terrain of national policy making. Second, we should try to answer the question to what extent any processes of Europeanization we observe are truly affecting the core of what member states are doing or are just added on to existing structures and policies. That is, if we believe that the EU really is capable of overriding member state concerns, the adaptations made by member states should be far from ‘easy’. The adoption of coordination structures, for instance, is an interesting phenomenon, but it does not constitute evidence of the EU’s transformative effect as coordination structures may simply be added on to existing organizational arrangements and can perfectly well co-exist with domestic institutions that were already out there. Finally, we should answer the question of how the European Union impacts on member states. Under what conditions does the EU succeed in bringing about domestic change, and when do member states carry on their business as usual

Tax Revenue Elasticities Corrected for Policy Changes in the EU

This paper investigates how tax revenue elasticities develop with respect to their tax base and analyses the specific impact of the business cycle. The main novelty of the paper is to use revenue data net of discretionary tax measures. Based on an EU country panel for the period 2001-13, we estimate short-term and long-term revenue elasticities for different revenue categories. Then, we add different indicators of the business cycle to test its specific influence on the short-term dynamics of revenue-to-base elasticities. A specific impact of the business cycle is found for all revenue categories, except for consumption taxes

A Model for the Elasticity of Compressed Emulsions

We present a new model to describe the unusual elastic properties of compressed emulsions. The response of a single droplet under compression is investigated numerically for different Wigner-Seitz cells. The response is softer than harmonic, and depends on the coordination number of the droplet. Using these results, we propose a new effective inter-droplet potential which is used to determine the elastic response of a monodisperse collection of disordered droplets as a function of volume fraction. Our results are in excellent agreement with recent experiments. This suggests that anharmonicity, together with disorder, are responsible for the quasi-linear increase of $G$ and $\Pi$ observed at $\varphi_c$.Comment: RevTeX with psfig-included figures and a galley macr

Deformation of Small Compressed Droplets

We investigate the elastic properties of small droplets under compression. The compression of a bubble by two parallel plates is solved exactly and it is shown that a lowest-order expansion of the solution reduces to a form similar to that obtained by Morse and Witten. Other systems are studied numerically and results for configurations involving between 2 and 20 compressing planes are presented. It is found that the response to compression depends on the number of planes. The shear modulus is also calculated for common lattices and the stability crossover between f.c.c.\ and b.c.c.\ is discussed.Comment: RevTeX with psfig-included figures and a galley macr

The Jamming Perspective on Wet Foams

Amorphous materials as diverse as foams, emulsions, colloidal suspensions and granular media can {\em jam} into a rigid, disordered state where they withstand finite shear stresses before yielding. The jamming transition has been studied extensively, in particular in computer simulations of frictionless, soft, purely repulsive spheres. Foams and emulsions are the closest realizations of this model, and in foams, the (un)jamming point corresponds to the wet limit, where the bubbles become spherical and just form contacts. Here we sketch the relevance of the jamming perspective for the geometry and flow of foams --- and also discuss the impact that foams studies may have on theoretical studies on jamming. We first briefly review insights into the crucial role of disorder in these systems, culminating in the breakdown of the affine assumption that underlies the rich mechanics near jamming. Second, we discuss how crucial theoretical predictions, such as the square root scaling of contact number with packing fraction, and the nontrivial role of disorder and fluctuations for flow have been observed in experiments on 2D foams. Third, we discuss a scaling model for the rheology of disordered media that appears to capture the key features of the flow of foams, emulsions and soft colloidal suspensions. Finally, we discuss how best to confront predictions of this model with experimental data.Comment: 7 Figs., 21 pages, Review articl

Velocity Profiles in Slowly Sheared Bubble Rafts

Measurements of average velocity profiles in a bubble raft subjected to slow, steady-shear demonstrate the coexistence between a flowing state and a jammed state similar to that observed for three-dimensional foams and emulsions [Coussot {\it et al,}, Phys. Rev. Lett. {\bf 88}, 218301 (2002)]. For sufficiently slow shear, the flow is generated by nonlinear topological rearrangements. We report on the connection between this short-time motion of the bubbles and the long-time averages. We find that velocity profiles for individual rearrangement events fluctuate, but a smooth, average velocity is reached after averaging over only a relatively few events.Comment: typos corrected, figures revised for clarit

Photon Channelling in Foams

Experiments by Gittings, Bandyopadhyay, and Durian [Europhys. Lett.\ \textbf{65}, 414 (2004)] demonstrate that light possesses a higher probability to propagate in the liquid phase of a foam due to total reflection. The authors term this observation photon channelling which we investigate in this article theoretically. We first derive a central relation in the work of Gitting {\em et al.} without any free parameters. It links the photon's path-length fraction $f$ in the liquid phase to the liquid fraction $\epsilon$. We then construct two-dimensional Voronoi foams, replace the cell edges by channels to represent the liquid films and simulate photon paths according to the laws of ray optics using transmission and reflection coefficients from Fresnel's formulas. In an exact honeycomb foam, the photons show superdiffusive behavior. It becomes diffusive as soon as disorder is introduced into the foams. The dependence of the diffusion constant on channel width and refractive index is explained by a one-dimensional random-walk model. It contains a photon channelling state that is crucial for the understanding of the numerical results. At the end, we shortly comment on the observation that photon channelling only occurs in a finite range of $\epsilon$.Comment: 9 pages, minor change