Does Taxation Stifle Corporate Investment? Firm‐Level Evidence from ASEAN Countries

This article conducts a firm‐level analysis of the effect of taxation on corporate investment, using large‐scale panel data on non‐financial firms over the period 1990–2014, and controlling for macrostructural differences among ASEAN countries. We find a significant degree of persistence in fixed investment over time, which varies with firm characteristics, such as size, growth prospects, profitability and leverage. The non‐linear estimations indicate that taxation facilitates business investment (possibly by enabling public investment in infrastructure and human capital, and the proper functioning of government institutions), but this effect turns negative and stifles private investment growth as the tax burden increases.     

Do Employers' Responses to Crises Impact Men and Women Differently? Firm‐level Evidence from Indonesia

Do employers' responses to crises impact men and women differently? Using manufacturing census data from Indonesia this paper assesses gender differences in the impact of the East Asian crisis and to what extent these were due to differential treatment of men and women within firms and gender sorting across firms that varied in their exposure to the crisis. On average, women experienced higher job losses than their male colleagues within the same firm. However, the aggregate adverse effect of such differential treatment was more than offset by women being disproportionately employed in firms hit relatively less hard by the crisis. The null hypothesis that there were no gender differences in wage adjustment is not rejected.     

(When) Should We Use Foreign Direct Investment Data to Measure the Activities of Multinational Corporations? Theory and Evidence

This paper reviews the different concepts of measuring activities of multinational corporations. It aims at working out the economic relationships that theoretically exist between these measures under general economic assumptions and then empirically investigates to which extent such relationships exist in the data. As a main conclusion, foreign direct investment (FDI) stock data is indeed a good proxy for measuring most real economic activities of multinational firms. Discrepancies between FDI stock and other data can to a large extent be given a reasonable economic meaning, but observed asset‐to‐employment patterns in multinational production also call for more thorough future research.     

Fire‐sale FDI? The Impact of Financial Crises on Foreign Direct Investment

We analyze the evolution of foreign direct investment (FDI) inflows to developing and emerging countries around financial crises. We empirically examine the Fire‐Sale FDI hypothesis and describe the pattern of FDI inflows surrounding financial crises. We also add a more granular detail about the types of financial crises and their potentially differential effects on FDI. We distinguish between mergers and acquisitions (M&A) and greenfield investment, as well as between horizontal (tariff jumping) and vertical (integrating production stages) FDI. We find that financial crises have a strong negative effect on inward FDI in our sample. Crises are also shown to reduce the value of horizontal and vertical FDI. We do not find empirical evidence of fire‐sale FDI; on the contrary, financial crises are shown to affect FDI flows and M&A activity negatively.