Economic Effects of Regional Tax Havens

How does the opportunity to use tax havens influence economic activity in nearby non-haven countries? Analysis of affiliate-level data indicates that American multinational firms use tax haven affiliates to reallocate taxable income away from high-tax jurisdictions and to defer home country taxes on foreign income. Ownership of tax haven affiliates is associated with reduced tax payments by nearby non-haven affiliates, the size of the effect being equivalent to a 20.8 percent tax rate reduction. The evidence also indicates that use of tax havens indirectly stimulates the growth of operations in non-haven countries in the same region. A one percent greater likelihood of establishing a tax haven affiliate is associated with 0.5 to 0.7 percent greater sales and investment growth by non-haven affiliates, implying a complementary relationship between haven and non-haven activity. The ability to avoid taxes by using tax haven affiliates therefore appears to facilitate economic activity in non-haven countries within regions.

Chains of Ownership, Regional Tax Competition, and Foreign Direct Investment

This paper considers the effect of taxation on the location of foreign direct investment (FDI) and taxable income reported by multinational firms with particular attention to the regional dynamics of tax competition and the role of chains of ownership. Confidential affiliate-level data are used to compare the investment and income-reporting behavior of American-owned foreign affiliates across ownership forms and regions. Ten percent higher tax rates are associated with 5.0 percent lower FDI, controlling for parent company and observable aspects of local economies, and 0.9 percent lower returns on assets, controlling for parent company and level of FDI. Tax effects are particularly strong within Europe, where ten percent higher tax rates are associated with 7.7 percent lower FDI and 1.7 percent lower returns on assets. Indirectly owned foreign affiliates also exhibit strong tax effects, ten percent higher tax rates being associated with 12.0 percent lower FDI and 1.4 percent lower returns on assets. American firms finance a growing fraction of their foreign operations indirectly through chains of ownership, which now account for more than 30 percent of aggregate foreign assets and sales. Ownership chains are particularly concentrated among European affiliates. Since multinational firms from countries other than the United States face tax environments similar to those faced by indirectly owned affiliates of American companies, these results suggest a greater sensitivity of FDI to taxes for non-American firms. The results also suggest that European economic integration may have the effect of intensifying tax competition between European jurisdictions.

A Multinational Perspective on Capital Structure Choice and Internal Capital Markets

This paper examines the impact of local tax rates and capital market conditions on the level and composition of borrowing by foreign affiliates of American multinational corporations. The evidence indicates that 10 percent higher local tax rates are associated with 2.8 percent higher debt/asset ratios of American-owned affiliates, and that borrowing from related parties is particularly sensitive to tax rates. Borrowing by American affiliates responds to local inflation and political risks, and is more costly in countries with underdeveloped capital markets and those providing weak legal protections for creditors. Affiliates in environments where external borrowing is costly borrow less from unrelated parties: one percent higher interest rates are associated with 1.4 to 2.0 percent less external debt as a fraction of assets. Instrumental variables analysis reveals that affiliates substitute loans from parent companies for between half and three quarters of the reduced borrowing from unrelated parties stemming from adverse local capital market conditions. These patterns suggest that multinational firms are able to structure their finances in response to tax and capital market conditions, thereby creating opportunities not available to many of their local competitors.

Foreign Direct Investment and Domestic Economic Activity

How does rising foreign investment influence domestic economic activity? Firms whose foreign operations grow rapidly exhibit coincident rapid growth of domestic operations, but this pattern alone is inconclusive, as foreign and domestic business activities are jointly determined. This study uses foreign GDP growth rates, interacted with lagged firm-specific geographic distributions of foreign investment, to predict changes in foreign investment by a large panel of American firms. Estimates produced using this instrument for changes in foreign activity indicate that 10% greater foreign capital investment is associated with 2.2% greater domestic investment, and that 10% greater foreign employee compensation is associated with 4.0% greater domestic employee compensation. Changes in foreign and domestic sales, assets, and numbers of employees are likewise positively associated; the evidence also indicates that greater foreign investment is associated with additional domestic exports and R&D spending. The data do not support the popular notion that greater foreign activity crowds out domestic activity by the same firms, instead suggesting the reverse.

Capital Structure with Risky Foreign Investment

American multinational firms respond to politically risky environments by adjusting their capital structures abroad and at home. Foreign subsidiaries located in politically risky countries have significantly more debt than do other foreign affiliates of the same parent companies. American firms further limit their equity exposures in politically risky countries by sharing ownership with local partners and by serving foreign markets with exports rather than local production. The residual political risk borne by parent companies leads them to use less domestic leverage, resulting in lower firm-wide leverage. Multinational firms with above-average exposures to politically risky countries have 8.4 percent less domestic leverage than do other firms. These findings illustrate the impact of risk exposures on capital structure.

Swift UVOT Grism Observations of Nearby Type Ia Supernovae - I. Observations and Data Reduction

Ultraviolet (UV) observations of Type Ia supernovae (SNe Ia) are useful tools for understanding progenitor systems and explosion physics. In particular, UV spectra of SNe Ia, which probe the outermost layers, are strongly affected by the progenitor metallicity. In this work, we present 120 Neil Gehrels Swift Observatory UV spectra of 39 nearby SNe Ia. This sample is the largest UV (lambda < 2900 A) spectroscopic sample of SNe Ia to date, doubling the number of UV spectra and tripling the number of SNe with UV spectra. The sample spans nearly the full range of SN Ia light-curve shapes (delta m(B) ~ 0.6-1.8 mag). The fast turnaround of Swift allows us to obtain UV spectra at very early times, with 13 out of 39 SNe having their first spectra observed >~ 1 week before peak brightness and the earliest epoch being 16.5 days before peak brightness. The slitless design of the Swift UV grism complicates the data reduction, which requires separating SN light from underlying host-galaxy light and occasional overlapping stellar light. We present a new data-reduction procedure to mitigate these issues, producing spectra that are significantly improved over those of standard methods. For a subset of the spectra we have nearly simultaneous Hubble Space Telescope UV spectra; the Swift spectra are consistent with these comparison data.Comment: Accepted for publication in MNRA

CDS wide slit time-series of EUV coronal bright points

Wide slit (90" x 240" ) movies of four Extreme Ultraviolet coronal bright points (BPs) obtained with the Coronal Diagnostic Spectrometer (CDS) on board the Solar and Heliospheric Observatory (SoHO) have been inspected. The wavelet analysis of the He I 584.34 Å, O V 629.73 Å and Mg VII/IX 368 Å time-series confirms the oscillating nature of the BPs, with periods ranging between 600 and 1100 s. In one case we detect periods as short as 236 s. We suggest that these oscillations are the same as those seen in the chromospheric network and that a fraction of the network bright points are most likely the cool footpoints of the loops comprising coronal bright points. These oscillations are interpreted in terms of global acoustic modes of the closed magnetic structures associated with BPs

The "healthy dose" of nature: A cautionary tale

This is the author accepted manuscript. The final version is available on open access from Wiley via the DOI in this recordGrowing cross‐disciplinary interest in understanding if, how, and why time spent with nature can contribute to human health and well‐being has recently prompted efforts to identify an ideal healthy dose of nature; exposure to a specific type of nature at a specified frequency and duration. These efforts build on longstanding attempts to prescribe nature in some way, most recently in the form of so‐called “green prescriptions.” In this critical discussion paper, we draw on key examples from within the fields of health and cultural geography to encourage deeper and more critical reflection on the value of such reductionist dose‐response frameworks. By foregrounding the relationally emergent qualities of people's dynamic nature encounters, we suggest such efforts may be both illusory and potentially exclusionary for the many individuals and groups whose healthy nature interactions diverge from the statistical average or “normal” way of being. We suggest value in working towards alternative more‐than‐human approaches to health and well‐being, drawing on posthumanist theories of social practice. We present two practice examples—beach‐going and citizen science—to demonstrate how a focus on social practices can better cater for the diverse and dynamic ways in which people come to conceptualise, embody, and interpret nature in their everyday lives. We close by reflecting on the wider societal transformations required to foster greater respect for embodied difference and diversity.Economic and Social Research Council. Grant Number: ES/N015851/

The Iliad’s big swoon: a case of innovation within the epic tradition

In book 5 of the Iliad Sarpedon suffers so greatly from a wound that his ‘‘ψυχή leaves him’. Rather than dying, however, Sarpedon lives to fight another day. This paper investigates the phrase τὸν δὲ λίπε ψυχή in extant archaic Greek poetry to gain a sense of its traditional referentiality and better assess the meaning of Sarpedon’s swoon. Finding that all other instances of the ψυχή leaving the body signify death, it suggests that the Iliad exploits a traditional unit of utterance to flag up the importance of Sarpedon to this version of the Troy story