Joeri Gorter

Bio: Joeri Gorter is an academic researcher. The author has contributed to research in topics: Tax competition & Direct tax. The author has an hindex of 10, co-authored 18 publications receiving 475 citations.

Funds and Games: The Economics of European Cohesion Policy. ENEPRI Occasional Paper No. 3, October 2003

Abstract: [Executive Summary]. How effective is European cohesion policy in reducing regional welfare differences? Can the political game concerning the distribution of funds be consistent with an effective policy? And how should it be reformed if a number of Central and Eastern European Countries (CEECs) Cohesion support comprises the Structural Funds and the Cohesion Fund. After the Common Agricultural Policy it is the second largest item on the EU-budget: between 2000 and 2006, more than €200 billion will be allocated to regions and member states that lag behind in development, have industries in decline or face high unemployment. This amounts to more than 40% of the EU budget. It makes the distribution of funds subject to vigorous negotiations, which will only gain importance with the upcoming enlargement of the EU by twelve relatively Though the goal of cohesion policy lacks precision in official documents, it is to be interpreted as a way to reduce the welfare differences among European regions. Views differ as to whether cohesion policy is successful. On the one hand, the view of the European Commission is positive: in its Second Report on Economic and Social Cohesion it praises the effectiveness of current cohesion policies (EC, 2001b). On the other hand, some commentators take a more pessimistic view. Boldrin and Canova (2001) for example, claim that cohesion policy is ineffective because it is primarily motivated by political considerations other than the reduction This study contributes to the discussion on the effectiveness of cohesion policy in two ways. First, it comprehensively reviews case studies, simulation models and econometric estimates, something that has not been done previously with the same degree of thoroughness. From this review, we conclude that there is certainly scope for improvement in the effectiveness of cohesion policy. Second, the study makes use of the best-available data sources on cohesion policy to assess its impact upon redistribution and growth. This contributes to the relatively meagre body of econometric evidence. The results confirm some degree of redistributive efficiency: poor regions get more than rich regions. The extent to which cohesion support affects convergence remains, however, unclear. Some econometric analyses suggest that the funds have a negligible or even a negative impact on convergence, while others imply a significant positive impact. The study also makes use of a unique data set on national regional policy to estimate the extent of crowding out, i.e. the adverse impact of European funds on national regional support. This turns out to be an important phenomenon. How can cohesion policy be made more effective? The study considers various dilemmas that policy-makers face when thinking about cohesion policy reform. It also elaborates on how these dilemmas will change with the enlargement of the EU, and puts forward a number of directions for reform.

Capital income taxation in Europe : trends and trade-offs

Abstract: The EU capital market integrates Portfolios become more international, cross border mergers are the order of the day, and never before has there been so much foreign direct investment This links national tax systems Residents pay foreign capital income tax, foreigners pay domestic capital income tax, and no member state can afford to overlook the danger of capital flight What is the appropriate policy response? To do nothing? To coordinate tax systems at the European level? The data do not unequivocally support the tax-race-to-the-bottom hypothesis On the one hand, member states decrease their statutory capital income tax rates On the other, they broaden their capital income tax bases Thus, fear for an economy-wide undertaxation of capital income -the main tenet of tax competition theory- is as yet ungrounded Nevertheless, tax coordination may be beneficial It resolves relative undertaxation of particular kinds of capital, forces convergence of capital income tax rates, and creates order in the costly European tax maze Unfortunately, it simultaneously infringes upon the sovereignty of member states, and sidelines the disciplining force that tax competition exerts on government spending This study assesses the most important proposals for capital income tax coordination against a background of the recent trends in capital income taxation and the trade offs between distinct policy objectives It is a guide to the debate that is easy to read, yet firmly grounded in empirical evidence and economic theory

How Sensitive is FDI to Differences in Corporate Income Taxation within the EU

Abstract: Differences between corporate taxation of EU member states drive a wedge between after-tax and pre-tax productivity. This implies that productivity could be increased by reallocating capital from low-tax to high-tax member states. Moreover, the integration of the EU capital market may trigger tax competition among member states. The responsiveness of investors to taxation is crucial for the importance of both the misallocation of capital and the extent of tax competition. In this paper we measure this responsiveness by examining the relation between FDI positions and effective corporate income tax rates. Our estimates show that investors from one EU member state increase their FDI position in another EU member state by approximately four percent if the latter decreases its effective corporate income tax rate by one percentage point relative to the European mean.

How mobile is capital within the European Union

Abstract: The key result of the tax competition literature is that governments set inefficiently low tax rates on income from internationally mobile production factors. Therefore, there is a case for coordination of EU capital income taxes, provided that capital is mobile within the EU. We measure how the international allocation of capital depends on taxation by examining the relation between FDI positions and effective corporate income tax rates. An EU country typically increases its FDI position in another EU country by approximately four percent if the latter decreases its effective corporate income tax rate by one percentage point relative to the EU mean. This conditionally support the recent efforts of the EU to coordinate capital income taxation. The benefits or costs of tax coordination ultimately depend, however, on whether one views the government as a social welfare maximising agent or tax revenue maximising leviathan.

An Agenda for a Reformed Cohesion Policy A place-based approach to meeting European Union challenges and expectations

Abstract: EU regional policy is an investment policy. It supports job creation, competitiveness, economic growth, improved quality of life and sustainable development. These investments support the delivery of the Europe 2020 strategy. The present paper analysis two strategically different options of EU regional policy: place-neutral versus place-based policies for economic development. Our results suggest that in many EU regions the place-neutral policies may no be the best policy response to facing new challenges posed by deeper economic integration and globalisation.

Taxation and Foreign Direct Investment: A Synthesis of Empirical Research

Abstract: This paper reviews the empirical literature on the impact of company taxes on the allocation of foreign direct investment. We make the outcomes of 25 empirical studies comparable by computing the tax rate elasticity under a uniform definition. The mean value of the tax rate elasticity in the literature is around -3.3, i.e. a 1%-point reduction in the host-country tax rate raises foreign direct investment in that country by 3.3%. There exists substantial variation across studies, however. By performing a meta analysis, the paper aims to explain this variation by the differences in characteristics of the underlying studies. Systematic differences between studies are found with respect to the type of foreign capital data used, and the type of tax rates adopted. We find no systematic differences in the responsiveness of investors from tax credit countries and tax exemption countries.

Taxation and Foreign Direct Investment: A Synthesis of Empirical Research

Abstract: This paper reviews the empirical literature on the impact of company taxes on the allocation of foreign direct investment. We compare the outcomes of 25 empirical studies by computing the tax rate elasticity under a uniform definition. The median value of the tax rate elasticity in the literature is around −3.3 (i.e. a 1%-point reduction in the host-country tax rate raises foreign direct investment in that country by 3.3%). There exists substantial variation across studies, however. By performing a meta-analysis, the paper aims to explain this variation by the differences in characteristics of the underlying studies. Systematic differences between studies are found with respect to the type of foreign capital data used, and the type of tax rates adopted. We find no systematic differences in the responsiveness of investors from tax credit countries and tax exemption countries.

Handbook of Industrial Organization

Abstract: Handbook of industrial organization , Handbook of industrial organization , کتابخانه دانشگاه امام صادق(ع)

Going NUTS: The Effect of EU Structural Funds on Regional Performance

Abstract: The European Union (EU) provides grants to disadvantaged regions of member states to allow them to catch up with the EU average. Under the Objective 1 scheme, NUTS2 regions with a GDP per capita level below 75% of the EU average qualify for structural funds transfers from the central EU budget. This rule gives rise to a regression-discontinuity design that exploits the discrete jump in the probability of EU transfer receipt at the 75% threshold. Additional variability arises for smaller regional aggregates - so-called NUTS3 regions - which are nested in a NUTS2 mother region. Whereas some relatively rich NUTS3 regions may receive EU funds because their NUTS2 mother region qualifies, other relatively poor NUTS3 regions may not receive EU funds because their NUTS2 mother region does not qualify. We find positive growth effects of Objective 1 funds, but no employment effects. A simple cost-benefit calculation suggests that Objective 1 transfers are not only effective, but also cost-efficient.