Tax structure and entrepreneurship

Using macro-level panel data, we examine the effects of taxation and tax progressivity on entrepreneurship in a large group of European countries. We address two main questions. First, we try to explore whether tax increases discourage entrepreneurial activity, focusing on new self-employment (nascent entrepreneurship). Second, we investigate the impact of tax progressivity on entrepreneurship, again focusing on new self-employment. We find that tax progressivity at higher-than-average incomes has a robust negative effect on nascent entrepreneurship. We discuss the policy implications of our results.     

Dynamic usage of narrowband spectrum

We examine the potential for expansion of the white space spectrum sharing model in the 400 MHz band. As opposed to UHF broadcast spectrum, which contains unassigned or idle segments known as white spaces, the 400 MHz band is characterised by intensive licence usage. However, productive spectrum usage does not guarantee allocative efficiency, which would require knowledge of the highest value service for each licence. 400 MHz frequencies are not priced on opportunity cost. It is therefore difficult to ascertain the economically efficient mix of services to deploy in the 400 MHz band. Drawing parallels with the high-economic value revealed and generated through the operations of unlicensed white space devices in UHF broadcast spectrum, we identify untapped 400 MHz spectrum capacity, which we refer to as narrowband spaces. Encouraging dynamic spectrum usage of narrowband spaces could, similarly to TV white space usage help realise the efficient allocation of the 400 MHz band. However, the narrowband nature of the 400 MHz licences and high licensing turnover imply a significantly different concept of dynamic spectrum access than that considered for TV Bands. The paper discusses regulatory implications and the type of services suited to exploit narrowband spaces.     

Continuous Versus Discrete Time in Dynamic Common Pool Resource Game Experiments

Environmental and Resource Economics - We study the impact of discrete versus continuous time on the behavior of agents in the context of a dynamic common pool resource game. To this purpose, we...     

What Can We Learn from Droppers and Non-adopters About the Role of Advice in Agricultural Innovation?

In this article we assess the diversity of sources of advice identified by 678 adopters, 295 non-adopters and 107 droppers (or dis-adopters, who have ceased or reduced the use) of agricultural innovations across 13 European countries. For most innovations, the volume and composition of advisory supports (e.g. public advisory services, farm business organisations, NGOs, research and development sector, other farmers), at the whole farm level were similar between adopters, non-adopters and droppers. However, there were significant differences in relation to specific innovations. Farmers adopting digital technologies, soil-improving cropping systems, and common management of natural resources identified more diverse sources when assessing innovations, suggesting that more diverse advisory support supported successful implementation. For new on-farm activities, non-adopters had more varied sources of advice than adopters. This demonstrates that non-adoption can be a well-informed decision. Droppers typically identified fewer sources of advice on an innovation than adopters, particularly in the later stages of the innovation process, suggesting that lack of advice impeded successful implementation. The findings suggest that public funding for advisory services could usefully target emergent gaps: to support the provision of up-to-date advice on topics to farmers who have difficulty accessing advice, and to prevent unnecessary dropping by supporting the implementation of innovations.     

Microstructure and asset pricing: An insight on African frontier stock markets

This article investigates the impact of microstructure factors on asset pricing in some African stock markets. We use data on stocks listed on the Johannesburg Stock Exchange, the “Bourse Régionale des Valeurs Mobilières,” and the Nigeria Stock Exchange, and we consider international portfolio management from 2000 to 2014. Generalized least square and fixed effect are estimation methods used to highlight the effect of microstructure variables on expected return. At the same time, panel smooth transition regression (PSTR) modeling is considered to identify the thresholds in this effect. The results show that liquidity and to a lesser extent the number of trading days are the most common significant microstructure variables for all the studied markets. However, other variables’ effects on the return are specific to the considered stock markets. Furthermore, the PSTR estimator reveals that the impact of indicated factors on asset pricing is not linear because it produces a double threshold between return and microstructure.     

Age-related taxation of bequests in the presence of a dependency risk

This paper studies the properties of the optimal taxes on bequests when individuals differ in wage and in their risks of mortality and old-age dependance. Survival is positively correlated to income but dependency is negatively correlated with it. The government cannot distinguish between bequests motives, that is whether bequests resulted from precautionary reasons or from pure joy of giving reasons. Instead, it observes the timing of bequests and the health status at death. Under the utilitarian social welfare criterion, we show that bequests taxation results from a combination of equity, insurance, and public revenue motives. If redistribution concerns dominate insurance concerns, it is desirable to tax the most bequests of those individuals living long in good health and to tax the least bequests of those dying early. This is a direct consequence of the socio-demographic structure we assumed where richer agents live longer and in better health than poorer agents. To the opposite, if insurance concerns dominate redistributive concerns, early bequests should be the most taxed and, bequests under dependency the least taxed. Under the Rawlsian criterion, we find that early bequests should be the least taxed and bequests left by the healthy long-lived individuals should be the most taxed.     

Should ‘Impartial’ Advice be a Priority of European Agricultural and Rural Policies?

Recent EU legislation will require Member States to ensure that farm advice which is supported by EU funding is impartial. In this article we present the findings of an online workshop which asked whether this should be a priority for European advisory supports within the Common Agricultural Policy. The answer was ‘no’. At the workshop, results of AgriLink were presented for discussion with international experts. These results highlighted major pitfalls for setting the boundaries of independent advice. Participants from Europe and North America agreed that ‘impartial’ advisors providing or selling only advice are rare in many contexts. Key organisations offering farm advice in many European countries, such as farmers’ cooperatives, often have established relationships with commercial suppliers. Being apparently independent from industry is also not sufficient for ensuring that advice addresses societal issues. Farmers’ choice for advice is more likely to reflect established trusted relationships than the ‘impartiality’ of the advisor. Workshop participants instead argued that policies should focus on increasing transparency (revealing vested interests); investing in ‘back office’ activities to ensure that advisors have access to reliable and relevant evidence; and ensuring that the full range of EU farmers have access to professional advice.     

Age- and health-related non-linear inheritance taxation

This paper studies the design of optimal non linear bequest taxation when individuals differ in wage, survival and probability to become dependent at the old age. Following the recent health and economic literature, we assume that agents with higher wage have higher survival chances and lower risks to become dependent. Agents make precautionary savings for their old age taking into account the uncertainty on their health. They exhibit joy of giving utility, so that they also set aside money for their heirs. In the absence of annuity and long-term care (LTC) insurance markets, heirs obtain different levels of bequests, depending on whether the donor died early or late in life and whether he was healthy at time of death. We assume that the government does not observe the decomposition of bequests between voluntary and involuntary ones. Instead, it observes the timing of death and the health condition at death of the donor. We show that, under asymmetric information, on top of marginal income taxation, the bequests left by low-income individuals in case of early death should be taxed at the margin. To the opposite, bequests obtained later in life need not be taxed or subsidized at the margin.     

Did the great influenza of 1918–1920 trigger a reversal of the first era of globalization?*

International Economics and Economic Policy - I revisit the 1918–20 pandemic and ask whether it led to a reversal in the rise of trade and financial globalization that preceded it. Using...