Trade in services is often hampered by domestic administrative barriers, even when countries are members of the same regional
trade agreement. We exploit a large reform in the European Union (the EU Service Directive) aimed at reducing such administrative
hurdles in cross-border service provision to estimate its effects on service trade. We employ a difference-in-difference strategy
and a Pseudo Poisson Maximum Likelihood (PPML) panel approach to estimate gravity equations with multiple fixed effects. On
average, the reform increased intra-EU trade in targeted services between a lower bound of 27 percent and an upper bound of
55 percent, translating into an overall welfare increase between 0.35 and 1.04 percent. This effect of the reform on service
trade is corroborated by several robustness and placebo checks. Finally, a disaggregated analysis reveals significant differences
between countries and service sectors.
This paper provides evidence of evasion in the context of a widely used commuter tax allowance, and explores evasion spillovers
as a determinant of the individual compliance decision. For this purpose, we exploit discontinuities in the commuter allowance
scheme and employ a research design resting on a large panel of individual tax returns. We find that around 30 percent of
all allowance claims are overstated and, consistent with deliberate tax evasion, we observe sharp reactions of tax payers
to thresholds where the allowance discretely jumps to a higher amount. Further, we use variation in job changes to uncover
spillover effects from the work environment on the individual compliance decision. These effects appear to be asymmetric:
job changers moving to companies with a higher fraction of cheaters increase their cheating. In contrast, movers to companies
with a lower fraction of cheaters tend not to alter their reporting behaviour. We provide suggestive evidence that the spillover
has more to do with an information environment, but can ultimately not reject other behavioural explanations such as asymmetric
persistence of norms.
This paper presents a theoretical model and empirical evidence to explain the occurrence of tax amnesties. We treat amnesties
as endogenous, resulting from a strategic game between many tax payers discounting future payments from punishment and a government
that trades off costs and benefits of amnesty programmes. From the model we derive hypotheses about the factors that should
influence the occurrence of tax amnesties. For our empirical test we rely on amnesty information from US states between 1981
and 2011. In line with the theoretical model, our empirical findings suggest that the likelihood of amnesties is mainly driven
by a government's fiscal requirements and the taxpayers' expectations on future amnesties.
This note proposes the continuous treatment approach as a valuable alternative to propensity score matching for evaluating
economic effects of mergers and acquisitions (M&As). This framework allows to consider the variation in treatment intensities
explicitly, and it does not call for the definition of cut-off values in traded ownership shares in order to construct a binary
treatment indicator. We demonstrate the usefulness of this approach using data from European M&As and by relying on the example
of post-M&A employment effects.
This paper analyses the relationship between corporate taxation, firm age and debt. We adapt a standard model of capital structure
choice under corporate taxation, focusing on the financing and investment decisions a firm is typically faced with. Our model
suggests that the debt ratio is positively associated with the corporate tax rate, and negatively with firm age. Further,
we predict that the tax-induced advantage of debt is more important for older than for younger firms. To test these hypotheses
empirically, we use a cross-section of 405,000 firms from 35 European countries and 126 NACE 3-digit industries. In line with
previous research, we find that a firm's debt ratio increases with the corporate tax rate. Further, we observe that older
firms exhibit smaller debt ratios than their younger counterparts. Finally, consistent with our theoretical model, we find
a positive interaction between corporate taxation and firm age, indicating that the impact of corporate taxation on debt is
increasing over a firm's life-time.
Die vorliegende Arbeit untersucht anhand von europäischen Unternehmensdaten den Einfluss der Körperschaftsteuer auf die Unternehmensverschuldung.
Der Datensatz enthält Bilanzinformationen von 110.620 Unternehmen aus 22 EU-Ländern im Zeitraum 1999/2007. Die ökonometrische
Schätzung eines dynamischen Panels mit fixen Unternehmens- und Zeiteffekten erlaubt die Berücksichtigung einer möglichen Persistenz
von Finanzierungsentscheidungen. Im Einklang mit den theoretischen Erwartungen zeigt sich ein signifikant positiver Zusammenhang
zwischen der Höhe des Körperschaftsteuersatzes und der Fremdkapitalquote. Große Unternehmen reagieren stärker, Aktiengesellschaften
hingegen schwächer auf Anreize der Unternehmensbesteuerung.
We provide evidence on the impact of globalisation on labour market outcomes analysing pay differences between foreign-acquired
and domestically-owned firms. For this purpose, we use firm level data from 16 European countries over the time period 1999
to 2006. Applying propensity score matching techniques we estimate positive wage premiums of cross-boarder merger and acquisitions,
suggesting that foreign acquired firms exhibit higher short-run (post-acquisition) wages than their domestic counterparts.
The observed wage disparities are most pronounced for low paying firms (with average wages below the median). Finally, we
find systematic wage premiums in Western European countries, but not so in Eastern Europe.