This paper develops an open economy model with heterogeneous final goods producers who simultaneously choose whether to export their goods and whether to use imported intermediates. The model highlights mechanisms whereby import policies affect aggregate productivity, resource allocation, and industry export activity along both the extensive and intensive margins. Using the theoretical model, we develop and estimate a structural empirical model that incorporates heterogeneity in productivity and shipping costs using Chilean plant-level data for a set of manufacturing industries. The estimated model is consistent with the key features of the data regarding productivity, exporting, and importing. We perform a variety of counterfactual experiments to assess quantitatively the positive and normative effects of barriers to trade in import and export markets. These experiments suggest that there are substantial aggregate productivity and welfare gains due to trade. Furthermore, because of import and export complementarities, policies which inhibit the importation of foreign intermediates can have a large adverse effect on the exportation of final goods.

Productivity and the Decision to Import and Export: Theory and Evidence

We run a large-scale natural field experiment to evaluate alternative strategies to enforce
compliance with the law. The experiment varies the text of mailings sent to potential evaders
of TV license fees. We find a strong effect of mailings, leading to a substantial increase in
compliance. Among different mailings, a threat treatment which makes a high detection risk
salient has a significant deterrent effect. Neither appealing to morals nor imparting information about others' behavior enhances compliance on aggregate. However, the information condition has a weak positive effect in municipalities where evasion is believed to be common. (authors' abstract)

/pdf/testing-enforcement-strategies-in-the-field-threat-moral-3q0g35peyd.pdf

Testing enforcement strategies in the field: threat, moral appeal and social information

The trade-off between child quantity and quality is a crucial ingredient of unified growth models that explain the transition from Malthusian stagnation to modern growth We present first evidence that such a trade-off indeed existed already in the nineteenth century, exploiting a unique census-based dataset of 334 Prussian counties in 1849 Furthermore, we find that causation between fertility and education runs both ways, based on separate instrumental-variable models that instrument fertility by sex ratios and education by landownership inequality and distance to Wittenberg Education in 1849 also predicts the fertility transition in 1880–1905

/pdf/the-trade-off-between-fertility-and-education-evidence-from-gsd0220j2k.pdf

The trade-off between fertility and education: evidence from before the demographic transition

What has driven trade booms and trade busts in the past and present? We derive a micro-founded measure of trade frictions from leading trade theories and use it to gauge the importance of bilateral trade costs in determining international trade flows We construct a new balanced sample of bilateral trade flows for 130 country pairs across the Americas, Asia, Europe, and Oceania for the period from 1870 to 2000 and demonstrate an overriding role for declining trade costs in the pre-World War I trade boom In contrast, for the post-World War II trade boom we identify changes in output as the dominant force Finally, the entirety of the interwar trade bust is explained by increases in trade costs

Trade Booms, Trade Busts and Trade Costs

https://dialnet.unirioja.es/descarga/articulo/3780273.pdf

Tax competition among local governments: Evidence from a property tax reform in Finland

The paper shows how entrepreneurial taxes interact with the career choice of individuals, the quality of entrepreneurs, and their investment behavior. It is particularly relevant to differentiate the early effects on start-up enterprises with substantial uncertainty from the tax effects on mature firms where the uncertainty is resolved. Conditions are derived for the Nordic dual income tax to be neutral and they are found to be stringent. Profit expectations matter. The Nordic dual encourages (discourages) the establishment of new enterprises by entrepreneurs who anticipate high (low) profitability.

/pdf/nordic-dual-income-taxation-of-entrepreneurs-5cmo64rfnh.pdf

Nordic Dual Income Taxation of Entrepreneurs

There is a lack of clear evidence of the ways in which dividend taxation affects dividend distributions and investment and the evidence is based mainly on the behaviour of large listed companies. This paper utilises a large register-based panel data set, where the vast majority of firms are small and medium-sized enterprises, to examine the responses to the Finnish dividend tax increase of 2005. This reform creates a useful opportunity to measure enterprise behaviour, since it involves exogenous variation in the tax treatment of different types of firms. The results, based on difference-in-differences estimation and matching methods, indicate that dividends declined somewhat in closely held corporations that faced a tax increase, perhaps for timing reasons, while investments did not decline. These findings are more in line with the new rather than the old view of dividend taxation.

https://www.econstor.eu/bitstream/10419/30458/1/608193178.pdf

The impact of dividend taxation on dividends and investment : new evidence based on a natural experiment

There is a lack of clear evidence of the ways in which dividend taxation affects dividend distributions and investment since the evidence is based mainly on the behaviour of large listed companies. This paper utilises a large register-based panel data set, where the vast majority of firms are small and medium-sized enterprises, to examine the responses to the Finnish dividend tax increase of 2005. This reform creates a useful opportunity to measure enterprise behaviour, since it involves exogenous variation in the tax treatment of different types of firms. The results, based on differences-in-differences estimation and matching methods, indicate that dividends declined somewhat in closely held corporations that faced a tax increase, perhaps for timing reasons, while investments did not decline. These findings are more in line with the new rather than the old view of dividend taxation.

The Impact of Dividend Taxation on Dividends and Investment: New Evidence Based on a Natural Experiment

Using register-based panel data covering all Finnish firms in 1999-2004, we examine how corporations anticipated the 2005 dividend tax increase via changes in their dividend and investment policies. The Finnish capital and corporate income tax reform of 2005 creates a useful opportunity to measure this behaviour, since it involves exogenous variation in the tax treatment of different types of firms. The estimation results reveal that those firms that anticipated a dividend tax hike increased their dividend payouts by 10-50 per cent. This increase was not accompanied by a reduction in investment activities, but rather was associated with increased indebtedness in non-listed firms. The results also suggest that the timing of dividend distributions probably offsets much of the potential for increased dividend tax revenue following the reform.

Anticipating Tax Changes: Evidence from the Finnish Corporate Income Tax Reform of 2005

Early-stage uncertainty makes the initial cost of capital greater than the expansion-stage one. Tax effects on enterprise formation, entrepreneurial effort and quality, and on capital costs are derived. For an incorporated enterprise (i) the entrepreneur's ability threshold rises with the tax rate of the corporate form, (ii) the initial cost of capital due to a dividend tax is above the old view double-tax one, (iii) the start-up investment is not affected by undervaluation, but the discouragement engendered by dividend taxation is compensated by realization-based capital gains tax, (iv) with undervaluation, the expansion-stage cost of capital corresponds to the Johansson-Samuelson tax which is lower than the new view suggests, (v) without undervaluation, the dividend tax boosts expansion investment.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID756627_code102458.pdf?abstractid=756627&mirid=1

Seppo Kari

Papers

Nordic Dual Income Taxation of Entrepreneurs

The impact of dividend taxation on dividends and investment : new evidence based on a natural experiment

The Impact of Dividend Taxation on Dividends and Investment: New Evidence Based on a Natural Experiment

Anticipating Tax Changes: Evidence from the Finnish Corporate Income Tax Reform of 2005

The Start-Up and Growth Stages in Enterprise Formation: The 'New View' of Dividend Taxation Reconsidered