Offering a unifying theoretical perspective not readily available in any other text, this innovative guide to econometrics uses simple geometrical arguments to develop students' intuitive understanding of basic and advanced topics, emphasizing throughout the practical applications of modern theory and nonlinear techniques of estimation. One theme of the text is the use of artificial regressions for estimation, reference, and specification testing of nonlinear models, including diagnostic tests for parameter constancy, serial correlation, heteroscedasticity, and other types of mis-specification. Explaining how estimates can be obtained and tests can be carried out, the authors go beyond a mere algebraic description to one that can be easily translated into the commands of a standard econometric software package. Covering an unprecedented range of problems with a consistent emphasis on those that arise in applied work, this accessible and coherent guide to the most vital topics in econometrics today is indispensable for advanced students of econometrics and students of statistics interested in regression and related topics. It will also suit practising econometricians who want to update their skills. Flexibly designed to accommodate a variety of course levels, it offers both complete coverage of the basic material and separate chapters on areas of specialized interest.

Estimation and Inference in Econometrics

https://isiarticles.com/bundles/Article/pre/pdf/41674.pdf

Foreign investors' interests and corporate tax avoidance: Evidence from an emerging economy

The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

The Economic Institutions of Capitalism

Contrasting treatment‐specific survival using double‐robust estimators

The paper explores the linkages between political risk, institutions and foreign direct investment inflows. Using different econometric techniques for a data sample of 83 developing countries and the period 1984 to 2003, we identify those indicators that matter most for the activities of multinational corporations. Overall, 12 different indicators for political risk and institutions are employed in the empirical analysis. The results show that government stability, the absence of internal conflict and ethnic tensions, basic democratic rights and ensuring law and order are highly significant determinants of foreign investment inflows.

Political Risk, Institutions and Foreign Direct Investment

Evidence on corruption as an incentive for foreign direct investment

How Reliable is Pooled Analysis in Political Economy? The Globalization-Welfare State

Panel data analysis has become very popular in comparative political economy. However, in order to draw meaningful inferences from such data, one has to address specification and estimation issues carefully. This paper aims to demonstrate various pitfalls that typically occur in applied empirical work. To illustrate this, we refer to the debate on the globalization-welfare state nexus. We reexamine a model by Garrett and Mitchell (2001), a leading study in this regard. Utilizing a data set of 17 OECD countries and the time period 1961 to 1993, they find evidence that globalization and partisan composition have a significant impact on the extent of public activity. However, because they apply a dynamic specification in levels, they do not adequately take into account both the dynamic and spherical nature of the data. In contrast, we propose an autoregressive model in first differences that is shown to perform well in statistical terms. Further, we explicitly pay attention to the time pattern of the globalization-welfare state nexus. Substantively, we find evidence that government spending is primarily driven by the state of the domestic economy. Neither partisan effects nor the international economic environment have affected public expenditure considerably.

http://www.mpi-fg-koeln.mpg.de/pu/mpifg_dp/dp02-3.pdf

How reliable is pooled analysis in political economy? The globalization‐welfare state nexus revisited

This article analyzes the sign and development of the effect of corruption on foreign direct investment (FDI). Economic theory distinguishes grabbing hand corruption from helping hand corruption. The former suggests a negative impact of corruption on FDI, the latter one a positive effect. Empirically, we apply a data set of 21 home and 59 developed and less developed host countries covering between 1983 and 1999. To investigate the corruption impact, we employ a panel data model that particularly refers to the knowledge‐capital model of multinational activity. We find a negative relationship between corruption and FDI. This, in turn, suggests that the helping hand effects of corruption are outweighed by the grabbing hand effects. Further, we observe that corruption is an important impediment of FDI in developed economies but not in less developed ones. Finally, we demonstrate that the importance of corruption has decreased over the years.

https://www.jstor.org/stable/10.1086/497010

How Corruption Influences Foreign Direct Investment: A Panel Data Study

The theory of international tax competition suggests a shift of tax burden from mobile to immobile tax bases, especially for small open economies. This paper assesses these hypotheses empirically using a sample of 23 OECD countries and the time period 1965–2000. In accordance with tax competition theory, we find that capital mobility exerts a negative impact on capital tax burden, and a positive one on labor tax burden. Further, we observe a positive effect of country size, suggesting that small open economies are levying lower capital and labor taxes than larger ones. Finally, we analyze the time pattern of tax competition and demonstrate that tax competition has intensified since the mid 1980’s.

Hannes Winner

Papers

Evidence on corruption as an incentive for foreign direct investment

How Reliable is Pooled Analysis in Political Economy? The Globalization-Welfare State

How reliable is pooled analysis in political economy? The globalization‐welfare state nexus revisited

How Corruption Influences Foreign Direct Investment: A Panel Data Study

Has Tax Competition Emerged in OECD Countries? Evidence from Panel Data