The effects of agglomeration on tax competition: evidence from a two-regime spatial panel model on French data

This article studies how agglomeration economies affect tax competition between local jurisdictions. We develop a theoretical model with two main testable predictions: in a setting where agglomeration forces lessen the responsiveness of capital to tax, high-regime agglomeration jurisdictions should adopt a rent-taxing behavior, and they should react less to their neighbors’ tax policies. The panel dataset spans the period from 1995 to 2007 and focuses on the local business taxes set at the French mid-subnational jurisdiction level of départements. First, instrumental variables estimates indicate that attractive jurisdictions capture a significant part of firms’ agglomeration rent by levying higher tax rates. An increase by 1% of the localization economies indicator (a specialization index) leads to increasing the business tax rate by 0.43%. Second, local tax setting behaviors are characterized by a mimetic behavior, with best response functions that slope upwards. We propose a two-agglomeration-regime spatial lag model to estimate through ML the relationship between tax competition and attractiveness. Our main result shows that both are linked and tax mimicry is less pronounced if a jurisdiction is agglomerated. Specifically, in response to a decrease in the tax rate of neighboring local governments by 1%, local governments with strong agglomeration economies reduce their tax rate by 0.4% against 0.6% for local government characterized by a low-agglomeration regime. We show that the classical one-size-fits-all-case of a single regime of agglomeration suffers from a 40% downward bias for low-agglomeration jurisdictions. We draw the link to policy praxis by discussing the optimal design of equalization schemes.     

地方官员更替、企业辖区知名度与股价同步性

以2009～2013年我国A股上市公司为研究样本,实证分析地方官员更替、辖区企业知名度与股价同步性的关系,结果表明:地市级政府官员变更所带来的政治不确定性会显著降低辖区企业的股价同步性,并且相对于新任官员来源于本地而言,新任官员来源于异地更能够显著地降低辖区内企业的股价同步性.进一步研究还发现,当地市级政府官员发生变更时,相对于辖区知名度较高的企业而言,辖区知名度较低的企业会披露更多的企业私有信息以应对政治不确定性风险,从而其股价同步性有了更大程度的降低.研究的结论证实了政治不确定风险的增加能够显著降低辖区内企业的股价同步性,客观上有助于提高股价的信息含量.     

Administrative Federalism and a Central Government with Regionally Based Preferences

Administrative federalism is defined as a constitution where the central state sets quality standards for public projects, and the local jurisdictions decide which projects are to be carried out. Decentralized decisions are inefficient because of an interjurisdictional spillover. A centralized decision is inefficient because the center favors one region and is restricted to distortionary instruments when redistributing between regions. For intermediate values of the spillover, it is shown that administrative federalism leads to a higher welfare than both centralization and decentralization. Moreover, because jurisdictions fear to be exploited, they only join a federation whose constitution is administrative federalism but not one with a fully centralized constitution.     

On NIMBY and commuting

The paper highlights that the race-to-top result shown by Wellisch (J. Urban Econ. 37:290–310, 1995) and Kunce and Shogren (J. Environ. Econ. Manage. 50:212–224, 2005a) may be exacerbated by inter-jurisdictional commuting, leading to increased NIMBY behavior (Not-In-My-Back-Yard) among metropolitan jurisdictions. Local governments try to push polluting economic activities to the neighboring jurisdictions, while commuting guarantees their residents’ labor income. Commuting generates a leakage of the local production benefits of pollution as non-resident commuters take the wages to their home jurisdictions. Jurisdictions may thus face a prisoners’ dilemma, in which they all push for pollution levels that are too low (race-to-the-top). Fiercer competition in the common labor market due to a larger number of jurisdictions intensifies this race-to-the-top in environmental regulation; whereas transboundary pollution, local ownership of firms, pollution taxes, and payroll taxes reduce the incentive for overly restrictive pollution policies.     

Corruption,governance, and public pension funds

We examine the effects of state corruption as well as political and governance factors on U.S. public pension funds. We find that pension funds in states with more corruption have lower performance; a one standard deviation increase in corruption is associated with a decrease in annual returns of at least 14 basis points, and this relationship is robust to state-level and pension-level fixed effects. Pensions located in more corrupt jurisdictions also invest a larger fraction of their assets in equities. We find that having a new treasurer decreases the negative effects of corruption, suggesting that more frequent changes in administrations are beneficial in corrupt jurisdictions. Governance-related variables and political affiliation variables are by themselves not significantly related to pension returns, although these variables are associated with differences in asset allocation.     

The Effects of Government Regulations on the Supply of Pawn Loans: Evidence from 51 Jurisdictions in the U.S.

We contribute to the modest amount of existing empirical research on the fringe banking industry by examining the effects of two jurisdiction-specific restrictive regulations on the supply of pawn loans. Controlling for poverty levels, education levels, and population density, state-by-state data presented in this paper from the 51 political jurisdictions in the United States suggests considerable effects in expected ways on five aspects of supply from the two regulations. More specifically, the study provides support for the suggestion that interest rate ceilings and a requirement to return excess proceeds from the sale of collateral items tend to reduce the number of store hours, loan/value ratios, the number of very small loans made, and the number of existing pawnshops. An erratum to this article is available at .     

Natural Disaster Insurance and the Equity-Efficiency Trade-Off

This article investigates the role of private insurance in the prevention and mitigation of natural disasters. We characterize the equity‐efficiency trade‐off faced by the policymakers under imperfect information about individual prevention costs. It is shown that a competitive insurance market with actuarial rate making and compensatory tax‐subsidy transfers is likely to dominate regulated uniform insurance pricing rules or state‐funded assistance schemes. The model illustrates how targeted tax cuts on insurance contracts can improve the incentives to prevention while compensating individuals with high prevention costs. The article highlights the complementarity between individual incentives through tax cuts and collective incentives through grants to the local jurisdictions where risk management plans are enforced.     

Yardstick competition and the political costs of raising taxes: An empirical analysis of Spanish municipalities

We test the ‘yardstick competition’ hypothesis by examining the effects of property tax increases, both in a given municipality and in other neighbouring jurisdictions, on the incumbents’ vote. In order to obtain unbiased estimates of the effects of raising taxes on voting patterns, we take into account national political shocks, the ideological preferences of the citizenship and government traits, and apply Instrumental Variables. The vote equation is estimated using a large database containing nearly 3,000 Spanish municipalities, and we analyse three local election results (1995, 1999 and 2003). Our results suggest that property tax increases, both at the municipal and neighbourhood level, have a non-negligible impact on the incumbent’s share of the vote. JEL Classification H71 · H73     

政治关联、融资渠道与民营企业非效率投资研究

从自由现金流和银行贷款两方面考量2007~2010年沪深A股民营上市企业政治关联对企业非效率投资的影响。结果表明,存在政治关联民营企业容易利用自由现金流和银行长期贷款进行过度投资;存在地方政治关联的民营企业,其自由现金流的过度投资更严重,中央政治关联企业则存在更多利用长期贷款进行过度投资的行为。同时,投资不足的民营企业政治关联降低了企业投资对于自由现金流和银行短期贷款的依赖;中央政治关联的民营企业投资对于银行长期贷款的敏感度更高,地方政治关联企业未发现类似的显著影响。     

论公共品的权限问题

地方公共品的供给是个复杂的问题,不仅涉及到地区间利益的分配,也涉及到个体间福利的变化.从空间意义上看,每一公共品既有一定的受益边界,又对应着一定的供给主体.本文通过分析这两者之间的关系,探讨了地方公共品供给达到最优的条件,并对此基础上产生的几种制度安排作了评析.