Tariffs and formation of free trade agreements networks

This paper examines the formation of bilateral free trade agreements (FTAs) on the basis of country heterogeneity in the tariff level. We demonstrate that a country's unilateral incentive to form an FTA depends on the relative magnitudes of the (negative) market concession effect and the (positive) market expansion effect, both of which are determined by the tariff levels of the two FTA partner countries. Global welfare is maximised when all country pairs form FTAs. Two countries in equilibrium are more likely to form an FTA when their tariff gap is smaller or when their tariff levels are neither very high nor very low. This finding is robust to several extensions of the model. Our preliminary empirical analysis provides some evidence for the finding.     

How much can we trust China’s investment statistics?

Abstract

Building upon recent research into the underestimation of China’s official final consumption expenditure, this paper investigates the quality of China’s investment data. We strictly follow the official method to estimate the annual gross fixed capital formation (GFCF) expenditure from 2004 to 2012, and the resulting figures are significantly different from the official statistics. This implies that the ‘total investment in fixed assets’ data, which are the primary source for the estimation of GFCF, grossly exaggerate actual investments, and that the official GFCF figures are not, strictly speaking, independently estimated, as they are purported to be. We deduce that the official gross capital formation figure is more or less a residual item obtained by subtracting final consumption and net exports from the official GDP figure that is calculated based on the production-cum-income approach. As a result, the underestimation of China’s consumption expenditure automatically translates into overestimation of investment expenditure. We conclude that China’s official consumption and investment statistics cannot be trusted as the basis for policy discussions and academic research.     

Auditors' Responses to Workload Imbalance and the Impact on Audit Quality*

Using detailed data for fieldwork hours and audit hours by rank from audit engagements in Korea, we examine whether audits conducted under workload imbalance, proxied by busy‐season audits, impair audit quality, and how auditors adjust staff assignments for busy‐season audits. We generally find that busy‐season audits are associated with lower audit quality, and that audit firms reduce the involvement of senior auditors during busy‐season audits. In addition, the greater the involvement of senior auditors and junior auditors, the lesser the deterioration in audit quality. Finally, although there is no increase in interim audits in response to workload imbalance during busy seasons, increasing interim audits can mitigate the negative impact of busy‐season audits on audit quality. Our results are relevant to auditors and regulators, who have expressed concerns about the adverse effects of workload imbalance on audit quality.     

South Korea’s outward direct investment and its dyadic determinants: Foreign aid,bilateral treaty and economic diplomacy

This study investigates the factors that affect South Korean outward foreign direct investment (FDI) in developing countries. Most previous studies focus on monadic factors and do not consider how and to what extent bilateral relationships between South Korea and the host countries affect the investment decisions of Korean firms. The current study finds that interstate factors such as South Korea's international investment treaties with and official development assistance to host countries have positive effects on FDI to these countries, while presidential visits have strong and statistically significant effects on FDI only in countries located in non-Asian regions, especially the African continent. The findings suggest that the effects of bilateral relations on South Korea's FDI vary depending on the geographic location of the host country.     

The contractionary effects of tax shocks on productivity: An empirical and theoretical analysis

I analyze the effects of tax policy changes on US Total Factor Productivity. VAR estimates show that permanent and exogenous tax increases have strong, permanent, and negative effects on TFP which represent about 80% of change in output following the tax increase. I then build a DSGE model which has learning-by-doing and endogenous TFP evolution. The benchmark model is able to replicate the empirical impulse responses. However, when I calibrate the model as in the literature, the effect of taxes on TFP is substantially less elastic than in the data. I argue that this divergence may arise because tax changes labeled as exogenous can give spurious results or because of a mis-specified model.     

Granting preferential market access in services sequentially versus jointly with goods

Despite the cost and resource‐effectiveness of joint trade negotiations and complementarities between goods and services‐trade flows, more than 12% of the 132 WTO‐notified services‐trade agreements (STAs) in force until August 2015 were entered into effect sequentially to goods‐trade accords. This stylised fact motivates our study of the determinants of joint versus sequential negotiation/accession of goods and services accords, a subject hitherto unexplored in the growing literature on the determinants of STA membership. Our results suggest larger marginal effects of fundamental economic, geographic, institutional, doing business and services regulatory factors on the propensity of joint negotiation/accession compared to STA formation alone. Moreover, cultural‐distance variables are only found to affect the likelihood of joint preferential liberalisation of goods and services trade, without influencing STA‐only membership.     

Influencing factors of farmers’ willingness to withdraw from rural homesteads: A survey in zhejiang,China

The purpose of the paper is to analyse the influencing factors on farmers’ willingness of withdrawal from rural homesteads (WRH). Methods that included field surveys, factor analyses and case studies were used for this paper. The results show that farmers have a strong willingness to own the property on which their homesteads sit. There are deviations between homestead systems and execution. It is common that the area of a homestead exceeds the lawful standard, and one peasant family owns two or more homesteads. Peasant families have many concerns about WRH, which include: reduction of employment, lack of supporting social security, high expenditure of new houses, low compensation criteria for homesteads, decline in standard of living and inconvenience in agricultural production. Among all means of compensation, peasants prefer allocated residences, and they pay more attention to public service facilities and fundamental facilities. The authors argue that implementing employment and social security policies and setting up linkage mechanisms of WRH could help to smoothly push forward WRH.     

Free trade agreement and transport service trade

This study investigates the effects of free trade agreements (FTAs) on trade in transport services using OECD data from 2003 to 2006. Our analysis found that FTAs had a positive overall impact on transport services for multiple countries (i.e., 26 home and 56 partner countries). The resulting positive overall impact assures that, even with the challenges associated with different layers of services and the obstacles formed by generally low trade openness in the sector, the provisions in FTAs (e.g., national treatment and market access for goods and services) promote transport service trades. Our findings suggest that the provisions in FTAs encourage economic agents to increase engagement in transport services because of expanded openness of the physical movement of goods across international borders.     

Nontraditional student withdrawal from undergraduate accounting programmes: a holistic perspective

A collaborative project of several Quebec universities, this study investigates nontraditional student withdrawal from undergraduate accounting programmes. A nontraditional student is older than 24, or is a commuter or a part-time student, or combines some of these characteristics. Univariate and multivariate analyses of student dropout factors were performed. A logistic regression for full-time students indicates several significant determinants of student withdrawal: returning to school after working for some time, enrolment in a non-first choice programme, dissatisfaction with programme choice and courses, and low grade point average (GPA). For part-time students, low GPA is the main explanatory factor for student withdrawal. Other factors appear to be instrumental in withdrawal decisions, such as management of external resources (time and family responsibilities) for women. The results suggest that students would benefit from university support services to acquire learning strategies that improve perseverance. Lastly, in-class learning activities that help bolster grades could decrease student withdrawal rates.