Bank profitability and taxation

This paper investigates how banks’ activity is affected by the corporate income tax. For this purpose it uses aggregate data on all main components of the profit and loss account and on the interest rate applied on loans and on deposits for the banking sector of the main industrialized countries during the period 1981–2003. With such information we are able to disentangle the extent to which a bank is able to shift its tax-burden forward to its borrowers, depositors, and purchasers of fee-generating services. The main result is that the taxation of banks’ profit is equivalent to a taxation on loans and as such it exerts a substantial impact on the composition of banking sector revenues. However credit intermediaries have the ability to shift a substantial part of their corporate income tax burden and therefore differences in the level of taxation cannot explain the dispersion observed in banks’ net profitability across industrialized countries.     

Regional innovation and competitiveness in a dynamic representation

This paper combines the various strands of literature on knowledge and innovation as drivers of regional growth in an evolutionary model, representing the internal dynamics of a regional system focusing on Arthurian dynamic increasing returns to scale. The model shows how different evolutionary patterns can arise starting from identical local systems, and that the effects of policies are different depending on the state of the system. Simulation evolutionary economic geography models also allow to represent the complexity of spatial economic development without radically simplifying it and to formalize concepts which are otherwise only expressed—by economic geographers—as logical arguments.     

Labour supply in Italy: an empirical analysis of joint household decisions,with taxes and quantity constraints

This study applies an econometric framework which allows for complex non-convex budget sets, highly non-linear labour supply curves and imperfect markets with institutional constraints. A married couple's version of the model is estimated on Italian microdata. The empirical results show that male labour supply is rather inelastic while labour supply among females, especially participation, is considerably more elastic. The elasticities depend strongly on household income. The largest elasticities are found for females living in poor households. The results of the tax simulations suggest that there are only modest labour supply responses from replacing the 1987 system by proportional taxes. Copyright © 1999 John Wiley & Sons, Ltd.     

‘Better late than never’: the interplay between green technology and age for firm growth

Small Business Economics - This paper investigates the relationship between green/non-green technologies and firm growth. By combining the literature on eco-innovations, industrial organisation and...     

Income Inequality and Economic Growth: Evidence from American Data

While most cross-country studies find a negative relationship between income inequality and economic growth, studies that use panel data suggest the presence of a positive relationship between inequality and growth. This paper uses a cross-state panel for the United States to assess the relationship between inequality and growth. Using both standard fixed effects and GMM estimations, this paper does not find evidence of a positive relationship between inequality and growth but finds some evidence in support of a negative relationship between inequality and growth. The paper, however, shows that the relationship between inequality and growth is not robust and that small differences in the method used to measure inequality can result in large differences in the estimated relationship between inequality and growth.     

No institution is a free lunch: a reconstruction of Ronald Coase

The two major contributions of Ronald Coase, written at distant points of his long life, have been often interpreted as different and, somehow, contradicting views of the merits of the market mechanism. We argue that the underlying point of the two articles is the same, and it can be summarized by the statement that no institution is a free lunch. When the unity of the Coasian theory is properly understood, it offers a powerful challenge to standard neoclassical production theory and opens new analytical tools to understand and to compare the institutions of production.