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We use firm-level data from ASEAN5 to examine the significance of tax-motivated profit shifting by multinational enterprises and to analyze how anti-avoidance measures mitigate the profit shifting. We show that (1) tax-motivated profit shifting is statistically and economically significant, especially for manufacturing firms, (2) auditing and transfer-pricing scrutiny is more effective in reducing profit shifting than documentation requirement alone and (3) tax-motivated profit shifting is prominent for large firms, while anti-tax avoidance measures result in the absence of profit shifting detected from small manufacturing firms. The findings have important implications for developing countries with weak governance but dependent on MNEs.

We use firm-level data from ASEAN5 to examine the significance of tax-motivated profit shifting by multinational enterprises and to analyze how anti-avoidance measures mitigate the profit shifting. We show that (1) tax-motivated profit shifting is statistically and economically significant, especially for manufacturing firms, (2) auditing and transfer-pricing scrutiny is more effective in reducing profit shifting than documentation requirement alone and (3) tax-motivated profit shifting is prominent for large firms, while anti-tax avoidance measures result in the absence of profit shifting detected from small manufacturing firms. The findings have important implications for developing countries with weak governance but dependent on MNEs.

We present a vision for improving household financial surveys by integrating responses from questionnaires more completely with financial statements and combining them with payments data from diaries. Integrated household financial accounts--balance sheet, income statement, and statement of cashflows--are used to assess the degree of integration in leading U.S. household surveys, focusing on inconsistencies in measures of the change in cash. Diaries of consumer payment choice can improve dynamic integration. Using payments data, we construct a statement of liquidity flows: a detailed analysis of currency, checking accounts, prepaid cards, credit cards, and other payment instruments, consistent with conventional cash flow measures and the other financial accounts. (JEL D12, D14, E41, E42), I. INTRODUCTION During recent decades, interest in the study of household finance has grown rapidly. Campbell (2006) first advanced the case for treating household finance as a distinct field of [...]

Since 2001, Indonesia has undergone a rapid and extensive programme of decentralization of governance and resources from the centre to local level. This devolution has created a new class of regional political elites and has shifted significant power back to sub-national levels in Indonesia's centuries' long history of centre-local tensions. While the political motivations of mitigating centrifugal pressures appear to be vindicated, the anticipated gains in service provision and downstream economic impacts have not uniformly materialized: efficiency gains in some regions have been offset by the widespread emergence of clientalistic practices and fiscal inefficiencies. Recent efforts towards limited administrative and political recentralization underscore the tension that remains between the centre and local governments. Keywords: Indonesia, decentralization, political economy, public goods., 1. Introduction Indonesia's 'big bang' decentralization, which took effect in 2001, saw the country transform from highly centralized (Smoke and Lewis 1996) to highly decentralized governance (World Bank 2007). Unlike [...]

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.jpubeco.2007.05.011 Byline: Joseph J. Doyle (a)(b), Krislert Samphantharak (c) Keywords: Tax incidence; Gasoline; Spatial competition Abstract: There are surprisingly few estimates of the effects of sales taxes on retail prices, especially at the firm level. We consider the temporary suspension, and subsequent reinstatement, of the gasoline sales tax in Illinois and Indiana following a price spike in 2000. Earlier laws set the timing of the reinstatements, providing plausibly exogenous changes in the tax rates. Using a unique dataset of daily prices at the gas-station level, 70% of the tax suspension is passed on to consumers in the form of lower prices, while 80-100% of the tax reinstatements are passed on to consumers. Some evidence suggests that these short-run pass-through estimates are smaller near the state borders, with the tax reinstatements associated with relatively higher prices up to an hour's drive into neighboring states. Author Affiliation: (a) MIT Sloan School of Management, USA (b) NBER, USA (c) University of California, San Diego - Graduate School of International Relations and Pacific Studies, USA Article History: Received 25 August 2006; Revised 18 May 2007; Accepted 26 May 2007 Article Note: (footnote) [star] We would like to thank Severin Borenstein, Gordon Hanson, Craig McIntosh, Jim Poterba, Andrew Samwick, Tom Stoker, Joel Slemrod and two referees, as well as seminar participants at the University of California, San Diego, the NBER Public Economics Program Meeting, and the University of California Energy Institute for useful comments. Evan Chan provided excellent research assistance. Generous support from MIT Center for Energy and Environmental Policy Research is gratefully acknowledged.

This paper uses recent examples of natural disasters from Southeast Asia to illustrate some important arguments discussed in the literature on natural disasters and the economy. First, the severity of the consequences of disasters depends not only on the natural hazards, but also on societal factors. Second, the effects of the disasters on physical and human capital could go far beyond the directly observable loss of properties and lives. Third, disasters could have positive long-term consequences if they lead to a change in the total factor productivity of the economy. Fourth, the effects of disasters could spread beyond the country of origin, naturally and economically. Finally, assistance from the government provides implicit insurance that could crowd out private insurance, but the failures of the government in dealing with recent catastrophic disasters may help reduce the extent of this effect. [ABSTRACT FROM AUTHOR]

Lobbying dominates corporate political spending, but comprehensive studies of the benefits accrued are scarce. Using a dataset of all U.S. firms with publicly available financial statements, we delve into the tax benefits obtained from lobbying. Firms that spend more on lobbying in a given year pay lower effective tax rates in the next year. Increasing registered lobbying expenditures by 1% appears to lower effective tax rates by somewhere in the range of 0.5 to 1.6 percentage points for the average firm that lobbies. While individual firms amass considerable benefits, the costs of lobbying-induced tax breaks appear modest for the government. [ABSTRACT FROM AUTHOR]