The Effect of Succession Taxes on Family Firm Investment: Evidence From a Natural Experiment
Margarita Tsoutsoura
Journal of Finance,
No. 2,
2015
Abstract
This paper provides causal evidence on the impact of succession taxes on firm investment decisions and transfer of control. Using a 2002 policy change in Greece that substantially reduced the tax on intrafamily transfers of businesses, I show that succession taxes lead to a more than 40% decline in investment around family successions, slow sales growth, and a depletion of cash reserves. Furthermore, succession taxes strongly affect the decision to sell or retain the firm within the family. I conclude by discussing implications of my findings for firms in the United States and Europe.
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Assessing European Competitiveness: The New CompNet Microbased Database
Paloma Lopez-Garcia, Filippo di Mauro
ECB Working Paper,
No. 1764,
2015
Abstract
Drawing from confidential firm-level balance sheets for 17 European countries (13 Euro-Area), the paper documents the newly expanded database of cross-country comparable competitiveness-related indicators built by the Competitiveness Research Network (CompNet). The new database provides information on the distribution of labour productivity, TFP, ULC or size of firms in detailed 2-digit industries but also within broad macrosectors or considering the full economy. Most importantly, the expanded database includes detailed information on critical determinants of competitiveness such as the financial position of the firm, its exporting intensity, employment creation or price-cost margins. Both the distribution of all those variables, within each industry, but also their joint analysis with the productivity of the firm provides critical insights to both policy-makers and researchers regarding aggregate trends dynamics. The current database comprises 17 EU countries, with information for 56 industries, including both manufacturing and services, over the period 1995-2012. The paper aims at analysing the structure and characteristics of this novel database, pointing out a number of results that are relevant to study productivity developments and its drivers. For instance, by using covariances between productivity and employment the paper shows that the drop in employment which occurred during the recent crisis appears to have had “cleansing effects” on EU economies, as it seems to have accelerated resource reallocation towards the most productive firms, particularly in economies under stress. Lastly, this paper will be complemented by four forthcoming papers, each providing an in-depth description and methodological overview of each of the main groups of CompNet indicators (financial, trade-related, product and labour market).
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R&D Collaboration for Environmental Innovation
Gunnar Pippel
International Journal of Innovation Management,
No. 1,
2015
Abstract
The literature on the impact of R&D collaboration on environmental innovation performance of firms suggests that R&D collaboration is not always beneficial. Therefore, a more detailed analysis of the effects of R&D collaboration is necessary. This paper investigates the impact of R&D collaboration with different partner types on a firm’s environmental innovation performance. In addition, the paper addresses the question of whether the diversity of R&D collaboration partners is important to environmental innovation performance. Firm-level data from 2337 German firms are used in the regression analysis. The results suggest that R&D collaboration with suppliers, customers, universities, governmental research institutes, consultants and other firms within the same firm group has a significant positive impact on a firm’s environmental innovation performance, whereas collaboration with competitors has no significant impact. The diversity of R&D collaboration partners has a significantly positive impact on a firm’s environmental innovation performance.
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Corporate Taxation and Firm Location in Germany
Götz Zeddies
IWH Discussion Papers,
No. 2,
2015
Abstract
German Fiscal Federalism is characterized by a high degree of fiscal equalization which lowers the efficiency of local tax administration. Currently, a reform of the fiscal equalization scheme is on the political agenda. One option is to grant federal states the right to raise surtaxes on statutory tax rates set by the central government in order to reduce the equalization rate. In such an environment, especially those federal states with lower economic performance would have to raise comparatively high surtaxes. With capital mobility, this could further lower economic performance and thus tax revenues. Although statutory tax rates are so far identical across German federal states, corporate tax burden differs for several reasons. This paper tries to identify the impact of such differences on firm location. As can be shown, effective corporate taxation did seemingly not have a significant impact on firm location across German federal states.
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Network Positioning, Co-Location or Both?
Muhamed Kudic
Innovation Networks in the German Laser Industry. Springer Cham,
2015
Abstract
Previous research indicates that firm innovativeness can either be determined by a firm’s position within the network dimension or by its position within the geographical dimension. Integrative studies addressing both distinct and combined proximity effects remains rare (cf. Whittington et al. 2009). Thus, we address in this Chapter the following research question: Are firm-level innovation outcomes positively or negatively related to network positioning effects, geographical co-location effects or combined proximity effects; and if the latter case is true, are the combined effects substitutional or complementary in nature? Panel data count models with fixed and random effects were used to analyze a firm’s innovative performance as measured by patent application counts. This last empirical analysis is organized as follows: We start with a short introduction in Sect. 12.1. Next, we provide a brief discussion of theoretical background in Sect. 12.2. In Sect. 12.3 we introduce our conceptual framework and derive our hypotheses. In Sect. 12.4 we introduce the data and methods used. Next, we outline the estimation strategy and report our empirical results in Sect. 12.5. Finally, we discuss our findings and conclude with a number of critical remarks in Sect. 12.6.
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The Levelling Effect of Product Market Competition on Gender Wage Discrimination
Boris Hirsch, Michael Oberfichtner, Claus Schnabel
IZA Journal of Labor Economics,
No. 19,
2014
Abstract
Using linked employer–employee panel data for West Germany that include direct information on the competition faced by plants, we investigate the effect of product market competition on the gender pay gap. Controlling for match fixed effects, we find that intensified competition significantly lowers the unexplained gap in plants with neither collective agreements nor a works council. Conversely, there is no effect in plants with these types of worker codetermination, which are unlikely to have enough discretion to adjust wages in the short run. We also document a larger competition effect in plants with few females in their workforces. Our findings are in line with Beckerian taste-based employer wage discrimination that is limited by competitive forces.
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Linking Distress of Financial Institutions to Macrofinancial Shocks
Alexander Al-Haschimi, Stéphane Dées, Filippo di Mauro, Martina Jančoková
,
No. 1749,
2014
Abstract
This paper links granular data of financial institutions to global macroeconomic variables using an infinite-dimensional vector autoregressive (IVAR) model framework. The approach taken allows for an assessment of the two-way links between the financial system and the macroeconomy, while accounting for heterogeneity among financial institutions and the role of international linkages in the transmission of shocks. The model is estimated using macroeconomic data for 21 countries and default probability estimates for 35 euro area financial institutions. This framework is used to assess the impact of foreign macroeconomic shocks on default risks of euro area financial firms. In addition, spillover effects of firm-specific shocks are investigated. The model captures the important role of international linkages, showing that economic shocks in the US can generate a rise in the default probabilities of euro area firms that are of a significant magnitude compared to recent historical episodes such as the financial crisis. Moreover, the potential heterogeneity across financial firms.
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Taxes, Banks and Financial Stability
Reint E. Gropp
Taxation and Regulation of the Financial Sector,
2014
Abstract
In response to the financial crisis of 2008/2009, numerous new taxes on financial institutions have been discussed or implemented around the world. This paper discusses the connection between the incidence of the taxes, their incentive effects, and policy makers’ objectives. Combining basic insights from banking theory with standard models of tax incidence shows that the incidence of such taxes will disproportionately fall on small and medium size enterprises. The arguments presented suggest it is unlikely that the taxes will have a beneficial impact on financial stability or raise significant amounts of revenue without increasing the cost of capital to bank dependent firms significantly.
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The Structure and Evolution of Intersectoral Technological Complementarity in R&D in Germany from 1990 to 2011
Matthias Brachert, T. Broekel
Abstract
Technological complementarity is argued to be a crucial element for effective Research and Development (R&D) collaboration. The real structure is, however, still largely unknown. Based on the argument that organizations’ knowledge resources must fit for enabling collective learning and innovation, we use the co-occurrence of firms in collaborative R&D projects in Germany to assess inter-sectoral technological complementarity between 129 sectors. The results are mapped as complementarity space for the Germany economy. The space and its dynamics from 1990 to 2011 are analyzed by means of social network analysis.
The results illustrate sectors being complements both from a dyadic and portfolio/ network perspective. This latter is important, as complementarities may only become fully effective when integrated in a complete set of different knowledge resources from multiple sectors. The dynamic perspective moreover reveals the shifting demand for knowledge resources among sectors at different time periods.
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