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on Accounting and Auditing |
| By: | Loriane Py; Antoine Bozio; Delphine Irac |
| Abstract: | R&D and innovation are seen as key determinants of productivity and competitiveness and it has been recognized that the low growth performances of EU countries of the last decades can largely be attributable to their poor research performance, as compared to the US. As a consequence, most EU countries, in particular since the adoption of the Lisbon strategy, have provided tax incentives to increase business R&D, which still remains below the targeted level of 2% of GDP. In the actual context of large public deficit and given the amount of public spending involved, it is crucial to evaluate the impact and effectiveness of these policies. The aim of this paper is to contribute to this literature by evaluating the impact of the research tax credit system on both R&D investments and innovation. In our empirical analysis, we focus on the 2008 French reform, which was marked by the adoption of a pure volume-based scheme.Our empirical analysis relies on an ex post econometric evaluation of the 2008 reform. It is based on the combination of four datasets over the period 2004-2010: i) the yearly survey on R&D investments conducted by the French Ministry of Research which contains detailed information on firms' R&D, ii) the PATSTAT dataset of the European Patent Office which enables us to measure innovation at the firm-level (as measured by a count of the number of patents) iii) the tax files which enables us to identify all the firms in France which benefit from the research tax credit as well as it amount, and iv) the FIBEN dataset of the Banque de France which is used to control for firms' economic and financial characteristics. Our final sample includes 48,111 firms, from which 51.3% have taken advantage of the research tax credit. Our econometric strategy relies on the implementation of a difference in difference which amounts to comparing R&D and innovation outcome for firms which benefit from the research tax credit and for those which do not, before and after the implementation of the reform. The fact that each year in France, nearly 49% of firms which are registered in the R&D survey and which have positive R&D expenditures do not ask for the research tax credit can have several explanations: firms might not be aware of the policy, their R&D activities might not be eligible to the tax credit, asking for the research tax credit might be too complex and costly or firms might want to avoid a tax audit. Nevertheless, as we cannot exclude the possibility of a selection bias in the sample of treated and control firms, we also implemented propensity score matching analysis and are currently trying to refine our empirical strategy by using the suppression of the research tax credit ceiling. Our preliminary results suggest that firms which did benefit from the R&D tax credit relative to those that did not ask for it have significantly increased their R&D expenditures after the 2008 reform. Our results also show that the estimated elasticity differs when we focus on the intensive margin (i.e. when the sample is limited to firms which already ask for the research tax credit before the reform) as the reform led to a large number of firm entry in the tax credit scheme which are relatively smaller in terms of R&D investments. More importantly, we do not find evidence of a significant impact on innovation as measured by the number of patents at the firm level, up to 2 years after the implementation of the reform. Though the time span of analysis is short and that patenting can take more years, these preliminary results suggest that the effects of research tax credit on innovation might be more limited than expected. Finally, our results enable us to shed light on the relative effectiveness of the volume scheme as compared to the incremental one. |
| Keywords: | France, Tax policy, Impact and scenario analysis |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:6873&r=acc |
| By: | World Bank; International Monetary Fund |
| Keywords: | Banks and Banking Reform Private Sector Development - Business Environment Private Sector Development - Competitiveness and Competition Policy Private Sector Development - Emerging Markets Private Sector Development - Business in Development Finance and Financial Sector Development |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:19294&r=acc |
| By: | Nandkumar Nayar |
| Abstract: | See full paper See full paper See full paper |
| Keywords: | USA, Finance, Finance |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7163&r=acc |
| By: | Siedschlag, Iulia; Smith, Donal; Turcu, Camelia; Zhang, Xiaoheng |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2014/2/7&r=acc |
| By: | Galen Sher; Giuseppe Loiacono |
| Abstract: | Rationale and objective: The objective of this paper is to define the term "Maturity Transformation" and to measure the amount of interest rate risk arising from maturity transformation to which large European banks are exposed. Modeling approach and methodology: We collect balance sheet asset and liability data by maturity for the largest European banks, in more detail than is available from the major data providers. To these asset and liability exposures, we apply several methods for measuring interest rate repricing risk based on asset pricing models, including the latest Basel Committee guidelines. Preliminary/expected results: We are able to rank the banks in our sample based on measures of the interest rate risk of their loan portfolios using publicly available information. These risk measures are crucial for understanding the overall interest rate risk of banks, and for allowing supervisors, investors and customers to hold these institutions to account. |
| Keywords: | European Union, Finance, Microsimulation models |
| Date: | 2013–06–21 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:004912:5442&r=acc |
| By: | Johannes Pauser; Holger Gillet |
| Abstract: | - The paper examines efficiency in public input provision in two large jurisdictions with imperfect labour markets. - It analyses how equilibrium capital tax rates and public input provision levels differ between asymmetric jurisdictions that can strategically influence the interest rate on the common capital market in an international tax competition setting. - The corresponding lack in research and the motivation of the paper is explained in section 1 of the paper. - We use an international tax competition setting with public inputs (productive public goods) where regions are asymmetric (non-price-taking environment) and labour markets are distorted. - Decentralised jurisdictions maximise welfare of employed and unemployed individuals (benevolent governments). - Analysis of the decentralised Nash-equilibrium (Cournot-Nash), where policy makers select tax and expenditure instruments strategically to maximise the welfare in their region (for various tax games). - Comparative statics analysis of the reaction of capital and labour to a change in policy instruments: Public inputs, source-based capital taxes, head taxes. - Derivation of equilibrium capital tax rates, labour tax rates, and public input provision levels for different tax games. - The non-cooperative equilibrium is inefficient also when governments have capital and head taxes at disposal. - As a source of both the distortion in the capital allocation between jurisdictions and the inefficiency in public input provision, we identify the governments' incentives to decrease unemployment, as well as fiscal and pecuniary externalities. - Efficiency in public input provision can be restored, if the set of fiscal instruments available for regional policy makers is extended by a labour tax. |
| Keywords: | Global (International), Tax policy, Labor market issues |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7098&r=acc |
| By: | Anda Nugroho; Rita Helbra Tenrini |
| Abstract: | A large portion of the Indonesian population is entering the middle-class as its economy is growing rapidly. Nielsen, a leading media research said that currently, middle class in Indonesia is the third-largest in the world. There are about 74 million middle classes in Indonesia, and this number will double by 2020. In the other hand, economic growth also creates a problem of rising inequality. Inequality in Indonesia is worsened as the Gini index increasing from 0.308 in 1999 to 0,41 in 2011. Both conditions, rising middle class and increasing inequalities create a challenge for policy maker to design optimal Personal Income Tax (PIT) system that can capture the tax potential from middle class growth and at the meantime improving the inequality. In developing countries like Indonesia the tax system has been aimed at increasing government revenues as for the past 10 years, the personal income tax revenue has increased from 19,5 trillion rupiah in 2002 to 83,3 trillion rupiah in 2012. More than that, the income tax is also supposed to be used as a public policy instrument to alter after-tax income distribution. The purpose of this paper is to design a personal income tax system that can capture the increase in tax potential as the middle class growth and also promote better income distribution in Indonesia. Using microsimulaiton and Computable General Equilibrium (CGE) approach, we quantitatively analyze the way proposed PIT system affect government revenue and alter the inequality of the income distribution. First, we propose some PIT systems and quantify the way they affect after tax income by using the micro data. Next, we employ CGE model and execute the simulation to calculate the effect of proposed PIT systems on the Indonesian economy. We use Indofiscal (2011), a CGE model of the Indonesian economy with a focus on fiscal policy. The model has capability of evaluating a range of fiscal policy, including personal income taxes. The research seeks to design a personal income tax system that can capture the increase in tax potential as the middle class growth and also promote better income distribution in Indonesia. The result will help the policy makers to design a better income tax system in responding to the current situation of middle income growth and rising inequality. |
| Keywords: | Indonesia, Tax policy, Impact and scenario analysis |
| Date: | 2014–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:006356:7017&r=acc |