Corporate Taxation of Heterogeneous Firms and the Welfare Effects of Labour Unions

This paper examines the welfare effects of powerful labour unions when the government levies a uniform tax rate – as is currently the case in most OECD countries – and firms are heterogeneous with respect to productivity. I show that an increase in the bargaining power of labour unions can decrease the welfare loss generated by restriction of the tax policy and provide conditions under which powerful labour unions decrease the likelihood that firms will move abroad. I also reproduce the well‐known effect whereby powerful labour unions decrease corporate tax rates if firms are mobile.     

Why Firms Should Not Always Maximize Profits

Though corporate social responsibility (CSR) is on the agenda of most major corporations, corporate executives still largely support the view that corporations should maximize the returns to their owners. There are two lines of defence for this position. One is the Friedmanian view that maximizing owner returns is the social responsibility of corporations. The other is a position voiced by many executives, that CSR and profits go together. This article argues that the first position is ethically untenable, while the latter is not supported by empirical evidence. The implication is that there may be good reason for firms to deviate from a maxim of profit maximization. Ivar Kolstad is Senior Researcher at the Chr. Michelsen Institute (CMI). He is the head of the CMI Human Rights Programme, and the coordinator of the institute programme Business Ethics for Multinational Corporations in Developing Countries. He has published internationally on the topics of social norms and development economics.     

Attributes of Foreign Subsidiaries and the Location Strategy of Multinational Firms in Global Cities in Latin America

International business research has recently honed in on the subnational dimension of multinational enterprises (MNEs), particularly the city level. Through a binomial logistic regression of data from 254 foreign subsidiaries of 10 Latin American global cities between 2006 and 2012, we found that specific attributes of the firm related to the industrial sector, subsidiary control, and ownership level have a positive effect on the location choice in cities. In addition, we found that in the previous period and during the international financial crisis, MNEs exploited their internalization advantages more intensely by exerting greater control over their subsidiaries in global cities.     

Testing for Persistence of Profits’ Differences Across Firms

We review the logic and implications underlying both static and dynamic models of competition, and associated tests of competitive effectiveness. Complications arising due to innovation, mergers and cyclical factors are discussed. Points raised in the theoretical discussion are illustrated with case histories and estimates for a number of US and UK companies. The empirical analysis tests a larger set of models than has been used in most previous work, and uses longer time series of company profits. We conclude that the patterns of profits observed in both countries are consistent with a larger and more complicated set of models of the competitive process than has been assumed until now, and that further work remains to be done in clarifying both why some firms are persistently profitable, and the nature of the ‘shocks’ that appear to produce structural breaks in the time series of companies’ profits.     

Managerial Incentives and Heterogeneous Firms

An industry where managerial firms and entrepreneurial firms coexist is considered. We analyze the effects of increasing competitiveness, defined by the increase in the number of managerial firms, on the equilibrium managerial incentive scheme. Our analysis shows that an increase in the number of managerial firms would induce a managerial firm to tie the incentives more closely to profits. We also compare the equilibrium with the regular Cournot model.     

Malaysian Multinational Firms and the Management of their Subsidiaries

There are limited studies on multinational enterprises from lesser developed and smaller Asian countries and even less attention given to the area of subsidiary management in Asian firms. This article contributes to this knowledge gap with empirical evidence from a study of nine case studies of firms from Malaysia, a rapidly developing country. Differences as well as commonalities in the management of their subsidiaries were found among sample firms. These findings are discussed in relation to the literature on management of subsidiaries in other Asian and developed countries’ firms. Implications for research and limitations of the study are covered.     

Foreign Firms and Chinese Employment

This paper examines the effect of foreign direct investment (FDI) on employment in the Chinese manufacturing sector. As one of the world's largest recipients of FDI, China has arguably benefited from foreign multinational enterprises in various respects. However, one of the main challenges for China, and other developing countries, is job creation, and the effect of FDI on employment is uncertain. The effect depends on the amount of jobs created within foreign firms as well as the effect of FDI on employment in domestic firms. We analyse FDI and employment in China using a large sample of manufacturing firms for the period 1998–2004. Our results show that FDI has positive effects on employment growth. The relatively high employment growth in foreign firms is associated with their firm characteristics and their high survival rate. Employment growth is also relatively high in private domestic Chinese firms. There also seems to be a positive indirect effect of FDI on employment in private domestically‐owned firms, presumably caused by spillovers.     

Foreign Investment in Accounting Firms

According to Catalogue for the Guidance of Foreign Investment Industries promulgated by the State in 2002, Sino-foreign cooperatives and partnerships in accounting and auditing firms are allowed while equity join venture and wholly foreign- owned accounting and auditing firms are not allowed.     

我国涉外税收政策入世后的调整

加入WTO以后,我国的政策、法律法规有很多地方需要加以调整和修改,在涉外税收政策方面也应该与时俱进,适应经济发展的需要。文章分析了我国现行涉外税收政策存在的问题,提出了调整涉外税收政策的一些看法和建议。     

管理咨询业跨国公司对东道国客户的垂直约束行为研究

管理咨询业跨国公司为获取更大的市场份额和超额利润,往往会通过自己在知识信息、客户资源等方面的优势地位,对客户实施垂直约束行为。相比水平垄断而言,通过对客户的垂直约束行为来获得更强有力的市场地位,管理咨询业跨国公司付出的成本代价更小,方式上更加灵活隐蔽。但目前这类活动在我国并未受到足够的重视,为此,文章针对管理咨询服务业在客户服务中的特殊性,在研究管理咨询业跨国公司的垂直约束途径及其行为发展模式的基础上,提出了我国客户企业应对垂直约束和实现良性健康发展的相应建议。     

Locational Choice,Performance and the Growth of British Multinational Firms

This paper examines the role played by Canadian chartered banks in the banking crises that occurred in the United States during the period from 1870 to 1914. The particular hypothesis investigated is whether Canadian chartered banks, through their US branch offices, increased their share of total US deposits during these crisis periods because they were perceived as being relatively safer than US banks. Strong empirical support is found to support the hypothesis. This finding may help to explain the large presence of Canadian chartered banks in US financial markets. The reputation for stability that these banks earned during this period undoubtedly facilitated their expansion into the US market.     

Business Codes of Multinational Firms: What Do They Say?

Business codes are an oft-cited management instrument. But how common are codes among multinationals? And what is their content? In an unprecedented study, the codes of the largest corporations in the world have been collected and thoroughly analyzed. This paper presents the results of that study. Of the two hundred largest companies in the world, 52.5% have a code. More than half of these codes describe company responsibilities regarding quality of products and services (67%), adherence to local laws and regulations (57%) and the protection of the natural environment (56%). Many codes make reference to principles governing stakeholder relations (e.g. transparency (55%), honesty (50%) and fairness (45%)), corporate core values (e.g. teamwork (43%)), appropriate conduct among employees (e.g. discrimination (44%) and intimidation (43%)) and treatment of company property by employees (e.g. conflict of interests (52%), corruption (46%) and fraud (45%)). Monitoring compliance with the code is addressed in 52% of the codes. Based on this content study, three types of codes are distinguished: the stakeholder statute (72%), the values statement (49%) and the code of conduct (46%). The results of this inquiry present a benchmark for the evaluation and development of both individual and international business codes.     

外资律师行中国风雨路

目前，中国律师业仍然采用或多或少限制准入及保护本土法律服务市场的管理政策。中国已经加入WTO，适时开放中国法律服务市场，兑现入世承诺，已成为国内监管层面临的重大课题，也是中国律师业健康发展的趋势和保障！     

Foreign Investment in Establishing Law Firms

1. A representative office of a foreign law firm in China and its representatives may engage in the legal services.
2. A representative office and its representatives shall engage in the following legal activities excluding Chinese legal affairs：     

Heterogeneous Firms,Globalisation and the Distance Puzzle

Despite the strong pace of globalisation, the distance effect on trade is persistent or even growing over time (Disdier and Head, 2008). To solve this distance puzzle, we use the recently developed gravity equation estimator from Helpman et al. (2008) (HMR henceforth). Using three different data sets, we find that the distance coefficient increases over time when ordinary least squares (OLS) is used, while the non‐linear estimation of HMR leads to a decline in the distance coefficient over time. The distance puzzle, thus, arises from a growing bias of OLS estimates. The latter is explained by an increase in the importance of the bias from omitting the number of heterogeneous exporting firms relative to the bias from omitting zero trade flows. Furthermore, we show that including zero trade flows cannot solve the distance puzzle when using HMR. The HMR estimates are strongly correlated with the time pattern in freight costs reported by Hummels (2007).     

异质性企业出口、技术创新与生产率动态效应研究

本文探讨了异质性企业出口、技术创新与生产率的动态关系.在异质性企业垄断竞争模型的分析框架下,我们构建了企业出口、创新与生产率的动态结构模型,并通过参数化函数形式建立了计量模型.基于2005-2007年中国电子通信行业的企业面板数据,本研究采用biprobit、非线性最小二乘估计等模型对企业出口、技术创新与生产率的关系进行实证研究.研究结果表明,企业出口和创新的决策及其联动作用促进企业生产率的提高;企业的生产率、资本存量、劳动力投入和出口市场冲击是影响企业自选择行为的异质性因素;投资决策的回报随着企业生产率的提高而提高,因此生产率高的企业会自选择做出该投资决策以获得更大利润.我们的研究从理论和实证的视角在一个整体性的框架中验证了自选择效应、出口学习效应和生产率动态效应,同时对中国出口、创新和生产率的现状提出相应政策建议.     

Multinational Enterprises and Foreign Direct Investment: Introduction

This study uses firm‐level data on a large sample of European manufacturing firms to investigate the links between opening up foreign affiliates and firms’ productivity. The analysis is guided by recent theoretical models of international trade with firm heterogeneity. The paper finds that while only a small share of euro area firms locate affiliates abroad, these firms account for over‐proportionally large shares of output, employment and profits in their home countries. They have higher survival rates and their productivity growth is also higher. The strongest contribution is by productivity growth of existing firms with a multinational status rather than entry into the multinational status. finally, there are performance premia for multinationals with a large number of affiliates abroad relative to those with a small number.