Corporate Tax Systems and the Location of Industry

This paper analyzes the effects of different corporate tax systems on the location of industry within an economic geography model with regional size asymmetries. Both the North and the South gain industry by adopting a tax regime that produces the lowest tax level. As the share of expenditures in the North increases, the Nash equilibrium has this region setting regressive taxes, while the South introduces progressive taxation. The unilateral welfare-maximizing tax structure in the North (South) is the regressive (progressive) system when expenditures in the North increase. Welfare in the North (South) is however maximized if both regions set regressive (progressive) taxes, while regressive (progressive) taxation in both regions represents a joint welfare maximizing outcome if the economic size of the North is higher (lower) than a certain threshold value. As trade is liberalized, the equilibrium tax regime adopted depends on how pro ts respond to lower trade costs. Proportional taxation is never an equilibrium, neither as regional spending changes, nor as trade is liberalized.Economic Geography; Tax Systems; Corporate Taxation

Sedimentological effects of tsunamis, with particular reference to impact-generated and volcanogenic waves

Impulse-generated waves (tsunamis) may be produced, at varying scales and global recurrence intervals (RI), by several processes. Meteorite-water impacts will produce tsunamis, and asteroid-scale impacts with associated mega-tsunamis may occur. A bolide-water impact would undoubtedly produce a major tsunami, whose sedimentological effects should be recognizable. Even a bolide-land impact might trigger major submarine landslides and thus tsunamis. In all posulated scenarios for the K/T boundary event, then, tsunamis are expected, and where to look for them must be determined, and how to distinguish deposits from different tsunamis. Also, because tsunamis decrease in height as they move away from their source, the proximal effects will differ by perhaps orders of magnitude from distal effects. Data on the characteristics of tsunamis at their origin are scarce. Some observations exist for tsunamis generated by thermonuclear explosions and for seismogenic tsunamis, and experimental work was conducted on impact-generated tsunamis. All tsunamis of interest have wave-lengths of 0(100) km and thus behave as shallow-water waves in all ocean depths. Typical wave periods are 0(10 to 100) minutes. The effect of these tsunamis can be estimated in the marine and coastal realm by calculating boundary shear stresses (expressed as U*, the shear velocity). An event layer at the K/T boundary in Texas occurs in mid-shelf muds. Only a large, long-period wave with a wave height of 0(50) m, is deemed sufficient to have produced this layer. Such wave heights imply a nearby volcanic explosion on the scale of Krakatau or larger, or a nearby submarine landslide also of great size, or a bolide-water impact in the ocean

Ownership Structure, Board Composition and Investment Performance

In this paper the relation between ownership structure, board composition and firm performance is explored. A panel of Swedish listed firms is used to investigate how board composition affects firm performance. Board heterogeneity is measured as board size, age and gender diversity. The results show that Swedish board of directors have become more diversified in terms of gender. Also, fewer firms have the CEO on the board which can be interpreted as a sign of increased independency. The regression analysis shows that gender diversity has a small but negative effect on investment performance, and the same holds for CEO being on the board. The analysis also show that board size has a significant negative effect on investment performance. When incorporating all the explanatory variables into one equation however, the negative effect of larger boards dilutes the effect of gender diversity and having the CEO on the board.Corporate governance; board composition; investments performance; marginal q

The Comparative Political Economy of Economic Geography

This paper examines how different electoral rules affect the location decisions of firms through the effect on regional policy. The equilibrium location of industry in the economically smaller (larger) region is higher under majoritarian (proportional) elections. The standard prediction in the economic geography literature, that the larger region becomes the core when trade barriers are reduced, no longer holds. The establishment of manufacturing production in the smaller region is increasing in the level of regional integration. As trade is in- creasingly liberalized, the economy features a reversed core-periphery equilibrium. This result holds under both electoral rules. However, firms locate to the smaller region at a relatively higher rate in the case of majoritarian voting, hence, the reversed equilibrium occurs for a relatively lower level of regional integration with majoritarian elections. Empirical evidence shows that the model is consistent with qualitative features of the data, and the results are robust to an instrumental variable strategy that accounts for the potential endogeneity of the electoral rule.Economic Geography; Regional Policy; Electoral Rules

Comparative Trade Policy

Current research has found ambiguous results with respect to the effects of the type of electoral regime on trade policy. The present paper proposes a solution to this indeterminacy. It is shown that the equilibrium level of trade protection can be relatively higher, as well as lower, under a majoritarian electoral rule compared to proportional representation. The equilibrium outcome is shown to depend on the number of voters in swing districts who own a factor specific to the exporting industry in relation to those who possess claims to the specific input employed by the import-competing sector. It is further argued that political rents are lower (higher) under majoritarian elections if there are more factor owners in the swing districts with stakes in the exporting (import-competing) industry.Endogenous Tariff Formation; Trade Policy; Electoral Rules

Family Ownership and Returns on Investment – Founders, Heirs, and External Managers

This paper investigates how family ownership, control, and management affect firms’ investment performance. We use the identity of Chief Executive Officer (CEO) and Chairman of the Board (COB) to establish under what management the firm is: founder, descendant, or external management. The results show that founder management has no effect on investment performance in family firms, whereas descendant management has a negative impact on returns on investment. Having an externally hired manager significantly improves investment performance. The results also indicate that the separation of voting right from cash flow right has a negative impact on investment performance in both family and non-family firms, but the negative effect is larger in family firms.Ownership; Control; Management; Family Firms; Returns on Investments

Ownership Structure, Control and Firm Performance: The Effects of Vote Differentiated Shares

This paper contributes to the literature on ownership, control and performance by exploring these relationships for Swedish listed companies (1997-2002). We find that firms, on average, are making inferior investment decisions and that the use of dual-class shares have a negative effect on performance. According to our results concentration of ownership has a negative impact on investment performance and firm value when control instruments that separate votes from capital share are used. Marginal q is used as a measure of economic performance. It was presented in an article by Mueller and Reardon in 1993 and has recently been used in empirical studies of ownership and performance by among others Gugler and Yurtoglu (2003). Frequently Tobin’s q is used in studies of this type, but Tobin’s q has a number of disadvantages which can be circumvented by employing a marginal q. This study adds to earlier studies by investigating how the separation of vote and capital shares’ creates a wedge between the incentives and the ability to pursue value maximization. The relationships between the performance measure and different ownership characteristics like ownership concentration and foreign ownership are also investigated.marginal q; ownership structure; firm performance; investments; dual-class shares

Analysis of SPDEs Arising in Path Sampling Part I: The Gaussian Case

In many applications it is important to be able to sample paths of SDEs conditional on observations of various kinds. This paper studies SPDEs which solve such sampling problems. The SPDE may be viewed as an infinite dimensional analogue of the Langevin SDE used in finite dimensional sampling. Here the theory is developed for conditioned Gaussian processes for which the resulting SPDE is linear. Applications include the Kalman-Bucy filter/smoother. A companion paper studies the nonlinear case, building on the linear analysis provided here

Coalition oversight and blame avoidance in Greece

This article examines the behavior of Greek political parties before, as well as during, the recent austerity period. Drawing on coalition oversight and blame avoidance literature, it argues that the unpopularity of austerity governments leads to extreme levels of dissent within the coalition. I operationalize this ‘intra-coalition opposition’ behavior using parliamentary questions, a legislative institution that has not been studied in the context of coalition politics. The analysis demonstrates that junior members in unpopular austerity governments increase their use of parliamentary questions to a degree that matches or even exceeds the formal opposition. However, intra-coalition dissent is conditional on the type of unpopular government policies, and on the ideology of coalition members. Specifically, using a new method of text analysis, I show that while the socialist Panhellenic Socialist Movement uses its parliamentary questions to avoid or minimize the blame associated with austerity policies, the conservative New Democracy does not, because left-leaning parties are electorally vulnerable to austerity measures. The results have implications for studying dissent in coalition politics in general, and the politics of austerity in particular