Search results for: Gerda Dewit

Items from 1 to 13 out of 13 results

article

Thinking inside the box: Optimal policy towards a footloose R&D‐intensive firm

Gerda Dewit, Dermot Leahy

Journal of Public Economic Theory > 22 > 6 > 1921 - 1942

We derive the optimal policy mix of Research and Development (R&D)‐subsidies and corporate tax rates towards a footloose R&D‐intensive firm. Increasing R&D‐subsidies strengthens the firm's incentive to offshore production. The firm's home government can offset this by offering an appropriate corporate tax concession. The optimal policy package exhibits a “Matthew principle”: higher R&D‐subsidies...

article

Employment Protection and Firm Relocation: Theory and Evidence

Gerda Dewit, Holger Görg, Yama Temouri

Economica > 86 > 344 > 663 - 688

We examine the determinants of the decision to relocate activities abroad for firms located in OECD countries. We argue that particular firm‐specific features play a crucial role for the link between employment protection and relocation. Stricter employment protection laws over time in the current production location discourage firms’ relocation abroad. While larger, more productive firms and firms...

article

CORPORATE TAX GAMES WITH CROSS‐BORDER EXTERNALITIES FROM PUBLIC INFRASTRUCTURE

Gerda Dewit, Kate Hynes, Dermot Leahy

Economic Inquiry > 56 > 2 > 1047 - 1063

We construct a model of corporate tax competition in which governments also use public infrastructure investment to attract foreign direct investment, thus enhancing their tax bases. In doing so, we allow for cross‐border infrastructural externalities. Depending on the externality, governments are shown to strategically over‐ or underinvest in infrastructure. We also examine how tax cooperation influences...

article

Strategic R&D Commitment and the Gains from Trade

Gerda Dewit, Dermot Leahy

Review of International Economics > 24 > 5 > 1129 - 1148

This paper examines how trade liberalization affects innovation, profits and welfare in a model of reciprocal markets when firms pre‐commit to research and development (R&D). We establish that the equilibrium is not always unique and show that, with trade, R&D commitment leads to higher levels of innovation, lower profits, higher consumer surplus and higher welfare than when R&D is chosen...

article

Tax Uniformity: A Commitment Device for Restraining Opportunistic Behavior

GERDA DEWIT, DERMOT LEAHY

Journal of Public Economic Theory > 17 > 5 > 641 - 672

We show that uniform and differentiated tax systems diverge in their propensity to generate distortionary opportunistic behavior. First, when firms choose investment before the government can commit to its taxes, the tax scheme creates strategic incentives for firms to distort their investment. Second, a system of differentiated taxes has a greater propensity to foster strategic distortions in investment...

article

Employment Protection, Flexibility and Firms' Strategic Location Decisions under Uncertainty

Gerda Dewit, Dermot Leahy, Catia Montagna

Economica > 80 > 319 > 441 - 474

We construct a model in which oligopolistic firms decide between locating in a country where employment protection implies costly output adjustments and in one without employment protection. Using a two‐period three‐stage game with uncertainty, we demonstrate that location is influenced by both flexibility and strategic concerns. The strategic effects under Cournot work towards domestic anchorage...

article

SHORT‐RUN POLICY COMMITMENT WHEN INVESTMENT TIMING IS ENDOGENOUS: ‘MORE HARM THAN GOOD?’

Gerda Dewit, Dermot Leahy

Bulletin of Economic Research > 63 > 1 > 82 - 107

In our model, firms choose when to set cost‐reducing investment and the government, which only has short‐run commitment power, sets an output subsidy. We show that firms that delay investment without government intervention have an incentive to invest early under policy activism, strategically underinvesting or overinvesting to obtain larger subsidies. The policy scheme thus creates a new, potentially...

article

Should I stay or should I go? Foreign direct investment, employment protection and domestic anchorage

Gerda Dewit, Holger Görg, Catia Montagna

Review of World Economics > 2009 > 145 > 1 > 93-110

This paper examines theoretically and empirically how employment protection legislation affects location decisions of multinationals. We depart from the “conventional wisdom” by examining not only the effect of protection on inward foreign direct investment (FDI), but also a country’s ability to “anchor” potential outward investment. Based on our simple theoretical framework, we estimate an empirical...

article

Oligopsonistic Cats and Dogs

Gerda Dewit, Dermot Leahy

Review of Industrial Organization > 2009 > 35 > 3 > 257-274

This paper examines strategic investment behaviour when firms have oligopsony power in the input market. Focusing on the labour market, we study how a firm’s labour supply augmenting investment affects the equilibrium when oligopsonistic firms set wages. Relative to a non-strategic benchmark, optimal investment strategies involve boosting investment that leads rival employers to cut wages, but involves...

article

Investment timing under uncertainty in oligopoly: Symmetry or leadership?

Gerda Dewit, Dermot Leahy

Journal of Economics and Business > 2006 > 58 > 1 > 1-19

This paper examines firms’ investment-timing decisions in an oligopolistic set-up. Facing demand uncertainty, firms decide whether to invest early or wait until uncertainty has been resolved. We show that the precise form that investment commitment takes matters for the investment-timing outcomes that emerge. When firms can commit immediately to the final investment level, investment leadership may...

article

Rivalry in uncertain export markets: commitment versus flexibility

Gerda Dewit, Dermot Leahy

Journal of International Economics > 2004 > 64 > 1 > 195-209

This paper examines optimal trade policy in a two-period oligopoly model, with a home and a foreign firm choosing capital and output. Demand uncertainty, resolved in period two, gives rise to a trade-off between strategic commitment and flexibility in the firms' investment decisions. Firms' investment timing is endogenous and can be manipulated by the home government, which sets a subsidy before firms...

article

Intervention in risky export markets: insurance, strategic action or aid?

Gerda Dewit

European Journal of Political Economy > 2001 > 17 > 3 > 575-592

Because the use of trade policy is limited by international institutional arrangements, governments pursuing a policy of export promotion may want to use more indirect instruments to achieve their objectives. In that context, this paper focuses on the public provision of export insurance. While the prime objective is insurance against the risk of default faced by firms exporting to risky markets,...

article

Export Promotion Via Official Export Insurance

Filip Abraham, Gerda Dewit

Open Economies Review > 2000 > 11 > 1 > 5-26

Proponents of free trade argue that export promotion distorts competition and undermines the multilateral trade system. In most countries export insurance is provided by the government and, consequently, is driven more by a broad range of policy objectives than purely insurance principles. This paper, however, shows that export promotion does not necessarily imply trade distortions and that most export...

Filter options

Publication date

Set your own date range

INFONA - science communication portal

Search results for: Gerda Dewit

Add recipient

Sending message cancelled

Are you sure you want to cancel sending this message?

Send message

Filter options

Publication date

Date range setting

Set the date range to filter the displayed results. You can set a starting date, ending date or both. You can enter the dates manually or choose them from the calendar.

Keywords

Data set

Journal

Reporting an error / abuse

Sending the report failed

Accessibility options