Essays on firms in the global economy

This thesis explores how taxes and subsidies can influence the decisions of strategic firms acting in the global economy. Chapter 1 considers tax/subsidy competition for a multinational enterprise (MNE) between the governments of two potential host countries. It is shown that the MNE's decision to locate in the proximity of firms producing a homogeneous product may be the result of government subsidies that aim to capitalise on the potential for knowledge spillovers to indigenous industry; and that fiscal competition to host the MNE may increase the welfare of both winning and losing countries when it leads to the relocation of multinationals away from countries that do not have the potential to benefit from knowledge spillovers to countries that do. Chapter 2 analyses the impact of anti-profit-shifting policies in a model with competition for an MNE's production plant and its profits between two governments that have at their disposal two fiscal policy instruments. It is shown that any gains in tax revenues resulting from more costly profit shifting may be partly offset by higher subsidies in the bidding stage for the MNE's plant such that the positive impact of anti-tax avoidance policies on host countries' tax revenues may be smaller than anticipated. [Continues.]</div

Luminol-based Assay for Detection of Immunity Elicitor-induced Hydrogen Peroxide Production in Arabidopsis thaliana Leaves

In Arabidopsis thaliana, one of the very early immune-related responses induced after elicitor perception is the oxidative burst, i.e. reactive oxygen species (ROS) generation including superoxide anion and hydrogen peroxide (H2O2). ROS production plays different roles in a wide range of biotic and abiotic stress responses, including the closure of stomata and the regulation of cell expansion. In particular, elicitor-induced H2O2 is produced mainly by the membrane localized NAD(P)H oxidases RESPIRATORY BURST OXIDASE HOMOLOGUE D and F. In this protocol, we describe a simple and reproducible luminol/peroxidase-based assay to detect and evaluate immunity-related accumulation of H2O2 produced in Arabidopsis leaf discs treated with immunity elicitors, such as oligogalacturonides (OGs), flagellin (flg22) or the elongation factor-thermo-unstable (EF-Tu - elf18). This method is based on the detection of the luminescence released by excited-luminol molecules generated after the horseradish peroxidase (HRP)-catalyzed oxidation of luminol molecules in the presence of H2O2. Levels as well as duration of the luminescence are proportional to the amount of H2O2 produced by elicited leaf discs

Camalexin Quantification in Arabidopsis thaliana Leaves Infected with Botrytis cinerea

Phytoalexins are heterogeneous low molecular mass secondary metabolites with antimicrobial activity produced in response to pathogen invasion attempts at the infection site and represent an important part of the plant defense repertoire. Camalexin (3-Thiazol-2′-yl-indole) is a known phytoalexin first detected and isolated in Camelina sativa, from which it takes its name, infected with Alternaria brassicae (Browne et al., 1991). Production of camalexin is also induced in Arabidopsis thaliana leaves by a range of biotrophic and necrotrophic plant pathogens (bacteria, oomycetes, fungi and viruses) (Ahuja et al., 2012) as well as by abiotic stresses, such as UV and chemicals (e.g. acifluorfen, paraquat, chlorsulfuron and α-amino butyric acid) (Zhao et al., 1998; Tierens et al., 2002). Camalexin originates from tryptophan and CYP79B2 and CYP71B15 (PAD3) are P450 enzymes that catalyze important steps in its biosynthetic pathway (Glawischnig, 2007). In this protocol the detection and quantification of camalexin produced in Arabidopsis leaves infected with the necrotrophic fungus Botrytis cinerea is described

Full-function joint venture addressed to Retail Marketing Limited, Co-op Trading Company Limited, Polrem Limited, S. Borg & Sons Limited, Tower Supermarkets Complex Limited, Valyou Pendergardens Operations LTD, Belleview Supermarkets Co. LTD. and Valyou Supermarket Limited

1. On 30 December 2019, the Office for Competition within the Malta Competition and Consumer Affairs Authority (hereinafter referred to as “the Office”) received a notification of a proposed concentration pursuant to regulation 5 of the Control of Concentrations Regulations by which Retail Marketing Limited (hereinafter also referred to as “joint venture entity”) will itself take over all supermarket operations currently being conducted by Co-op Trading Company Limited, Polrem Limited, S. Borg & Sons Limited, Tower Supermarkets Complex Limited, Valyou Pendergardens Operations Ltd., Belleview Supermarkets Co. Ltd. and Valyou Supermarket Limited (hereinafter collectively referred to as “the Notifying Parties”). 2. The filing and the acceptance of such notification was notified to the public through a public notice in the Government Gazette number 20,327 on 10 January 2020 and a notice that appeared in a local newspaper and on the Malta Competition and Consumer Affairs Authority’s website on 10 January 2020. 3. Together with the Concentration Notification (CN) form, the notifying parties also submitted an economic and competitive assessment as compiled by Deloitte Services Limited on the grocery retail market in Malta. The aim of this market competitive assessment is to analyse and assess the indicative market competitive environment prevailing in the grocery retail sector both pre- and post- the potential integration of the operational activities of the four (4) established local supermarket chains, which collectively operate eight (8) retail supermarkets and one (1) convenience shop in Malta as shown in Table 1 below. In their market competitive assessment, the notifying parties estimated their market share to total per cent of the total grocery market and per cent of the supermarket sector, the discrepancy attributed to the fact that the former also includes convenience stores and local village grocers. As a result, the notifying parties argued that the Office should adopt the simplified procedure in assessing their proposed concentration in line with regulation 12 of the Control of Concentrations Regulations.peer-reviewe

EUROMOD update : feasibility study : Malta (Tax-Benefit Systems 2007-2010)

The purpose of this study is to examine the technical feasibility of micro-simulation model application for the analysis of impact of policy on social integration from the national as well as from the EU perspective. This is the first time that Malta’s tax-benefit system has been analysed from the angle of the main elements of this system implying the policy rules that are underlying the entitlement criteria defining them. This was an opportunity for the main players in this field to work in synergy on this vital issue: the Ministry for the Family and Social Solidarity, in charge of social benefits, Ministry of Finance responsible for the fiscal policy and income tax system in particular, and the National Statistics Office tasked with income data collection based on the EU-SILC methodology. This Feasibility Study describes the situation as it was in year 2007 and the major changes that have taken place in 2008 and 2009 and 2010. Firstly, the study describes the main elements of the tax-benefit system namely: income, income tax brackets, capital resources and Social Security contributions. The second section of the study illustrates the main sources of data to be used for modelling purposes and also shows the examples of the calculation of income tax and social benefits. It has been agreed that the EU SILC 2008 data would be used, for income element since Malta has joined this system of data collection way back in 2005. The third section of the study firstly outlines the qualities and limitations of the input data set. This section also focuses on specificities of Malta’s data collection and possible difficulties regarding model application. The study points at the possible combinations of sample and population databases. Also, simulation possibilities have been specified for both systems separately. Finally, the non-take up of benefit and the issue of tax and benefit fraud illustrate the situation and the possible unknown element on both sides.peer-reviewe

Estimating the economic impact of the Office for Competition on the Maltese economy

The Office for Competition in Malta is the leading administrative competition authority responsible for promoting sound competitive practices for attaining and maintaining well-functioning markets. This study quantifies the economic benefits on the Maltese economy via an economic impact assessment for the designated roles of the Office for Competition. Through an application of time-series econometrics, input-output modelling framework and the OECD’s guidelines to conduct such assessments, this study explores the direct and indirect multiplier effects that accrued on the Maltese economy as a result of the Office’s control of concentrations activities between 2014 and 2018. This study finds that the estimated financial benefit to the Maltese economy in terms of GDP averaged €10.2 million per year, €7.1 million in direct effects and €3.1 million in indirect benefits. This equates to a direct benefit-to-costs ratio of 30.4:1. This study should aid Maltese authorities in gauging the rate of return from the annual budget allocated to the Office for Competition and increase awareness of the benefits of competition law and policy.peer-reviewe

Economic and policy implications of industry interdependence : an input-output approach

The study provides an overview of the fundamental principles of input-output theory, the steps involved in linkage analysis and the estimation of industry multipliers. These have been estimated using a ‘new’ symmetric input-output table for the Maltese economy for 2007 which is used as an example to draw policy-relevant lessons for countries with relatively small open economies. On the basis of these estimates it is argued that (1) the effect of an increase in final demand will go beyond the industry directly affected by the initial change in expenditure, (2) that multipliers provide an important guide to policy makers that are concerned with making optimal use of their scarce resources, (3) that governments of countries that depend heavily on foreign direct investment can target labour intensive industries to tilt the balance in favour of the worker, (4) that a firm-specific approach is preferable to expansionary fiscal policy when a country is heavily dependent on imported products, and (5) that market distortions and inefficiencies are more damaging in those sectors that have strong forward linkages with other sectors in the domestic economy.peer-reviewe

Fiscal competition for FDI with knowledge spillovers and trade costs

We develop a model of fiscal competition for foreign direct investment, and show that the decision of multinational firms to locate in the proximity of indigenous firms – which can be thought of as agglomeration – may be the result of the provision of government incentives that aim to capitalise on the potential for knowledge spillovers to indigenous industry. Somewhat different but complementary to existing literature, we also show that fiscal competition may increase the welfare of both winning and losing countries in the auction for the multinational firm when it leads to the relocation of multinationals away from countries that do not have the potential to benefit from knowledge spillovers to countries that do. As trade costs fall and the potential for knowledge spillovers increases, both outcomes become more likely in equilibrium

Ethylene production in Botrytis cinerea- and oligogalacturonide - induced immunity requires calcium-dependent protein kinases

Plant immunity against pathogens is achieved through rapid activation of defense responses that occur upon sensing of microbe- or damage-associated molecular pattern, respectively referred to as MAMPs and DAMPs. Oligogalacturonides (OGs), linear fragments derived from homogalacturonan hydrolysis by pathogen-secreted cell wall-degrading enzymes, and flg22, a 22-amino acid peptide derived from the bacterial flagellin, represent prototypical DAMPs and MAMPs, respectively. Both types of molecules induce protection against infections. In plants, like in animals, calcium is a second messenger that mediates responses to biotic stresses by activating calcium-binding proteins. Here we show that simultaneous loss of calcium-dependent protein kinases (CDPKs) CPK5, CPK6 and CPK11 affects Arabidopsis thaliana basal as well as elicitor- induced resistance to the necrotroph Botrytis cinerea, by affecting pathogen-induced ethylene production and accumulation of the ethylene biosynthetic enzymes 1-aminocyclopropane-1-carboxylic acid (ACC) synthase 2 (ACS2) and 6 (ACS6). Moreover, ethylene signaling contributes to OG-triggered immunity activation, and lack of CPK5, CPK6 and CPK11 affects the duration of OG- and flg22-induced gene expression, indicating that these kinases are shared elements of both DAMP and MAMP signaling pathways. This article is protected by copyright. All rights reserved

Part I : assessment of the magnitude of aggressive corporate tax planning

This paper assesses the loss of tax revenue to the EU through aggressive corporate tax planning to be around 50-70 billion euro per annum. On an assumption of no base from sources other than profit shifting, then this figure jumps to 160-190 billion euro. The paper presents the methodology used and the country-by-country calculations on which these figures are based. It describes the common tools used in aggressive planning, and the impacts these have on tax revenue, concluding with an assessment of the inefficiencies created by individual tax arrangements for large multinational companies in the European Union.peer-reviewe