Francisco J. Delgado

The measurement of technical efficiency: a neural network approach

The main purpose of this paper is to provide an introduction to artificial neural networks (ANNs) and to review their applications in efficiency analysis. Finally, a comparison of efficiency techniques in a non-linear production function is carried out. The results suggest that ANNs are a promising alternative to traditional approaches, econometric models and non-parametric methods such as data envelopment analysis, to fit production functions and measure efficiency under non-linear contexts.

On the Determinants of Local Tax Rates: New Evidence from Spain

This paper studies the determinants of local tax rates. For the two main local taxes in Spain - the property tax and the motor vehicle tax - we test the existence of tax mimicking, yardstick competition and political trends in a sample of 2,713 municipalities. Using different spatial models, the results support the hypothesis of tax mimicking, with coefficients over 0.40. We also show the relevance of political variables such as the ideology of the incumbents and political fragmentation. The fact that incumbents with weaker political support display stronger mimicking behaviour is interpreted as evidence in favour of yardstick competition. Finally, we find incumbents mimic neighbouring municipalities ruled by the same political party, confirming the political trends hypothesis.

Convergence of fiscal pressure in the EU: a time series approach

The study of fiscal convergence in the EU is a relevant issue in the context of economic integration and fiscal harmonization and we report new empirical evidence on this topic using a time series approach. We apply unit root and stationarity tests with an endogenous break for the study of long run, deterministic and stochastic convergence of the national tax burden taking Germany, the United Kingdom and the European average as benchmarks. Only the United Kingdom and Germany show long run convergence and few countries converge despite harmonization efforts and fiscal competition.

Local tax interaction and endogenous spatial weights based on quality of life

ABSTRACT This paper studied the role of municipal quality of life as a driver of strategic tax interactions among local governments. A number of studies point out the existence of strategic interactions using spatial econometric models in which the spatial weights are mostly based on non-economic criteria or basic economic variables such as per capita gross domestic product (GDP). We propose the more sophisticated well-being indicator of municipal quality of life as the driver for these interactions. To deal with the potential endogeneity, we rely on instrumental variable estimators. The empirical analysis focuses on the main local tax in Spain (property) and on municipalities with more than 50,000 inhabitants, and it confirms the relevance of differentials in quality of life for the understanding of tax choices.

Are Taxes Converging in Europe? Trends and Some Insights into the Effect of Economic Crisis

In this note we empirically revise the task of tax convergence in the European Union, paying attention to the possible effects derived from the deep economic crisis. For this purpose, beta and sigma convergence are estimated for the period 1965-2010 from OECD data with the main subdivisions generally used in the tax area. The results reported suggest the existence of overall convergence of the tax structure and the tax burden in the period 1965- 2010, but with clear nonlinearities, as the major advances took place up until the end of the 1980s.

Tax Evolution in the EU: A Convergence Club Approach

This paper investigates tax convergence in 15 European Union Members States using annual data from 1975 to 2011. We follow the proposal of Phillips and Sul (2007) to test the convergence club hypothesis, complemented with a preliminary sigma convergence study, and focusing on the tax burden and tax mix with the major OECD subdivisions. Our results suggest sigma convergence in all cases, but to different degrees. We identify convergence clubs, with several clusters in each tax category and differences between the whole sample and the two sub-periods analyzed, namely 1975-1994 and 1995-2011. Key words: Taxation, Sigma convergence, Club convergence, European Union.JEL: C33, E62, H20. U radu se istražuje konvergenciju poreza u 15 zemalja clanica Evropske Unije koristeci godisnje podatke od 1975. do 2011. godine. Pratimo predlog koji su dali Peter C. B. Phillips i Donggyu Sul-a (2007) da testiramo hipotezu konvergencije klasa, upotpunjenu preliminarnom studijom sigma konvergencije i fokusirajuci se na poresko opterecenje i poreske mikseve sa glavnim podelama OECD-a. Nasi rezultati ukazuju na sigma konvergenciju u svim slucajevima, ali u razlicitim stepenima. Možemo identifikovati klase konvergencije, sa nekoliko klastera u svakoj kategoriji poreza i razlike između celog uzorka i dva pod-perioda koja su analizirana, konkretno 1975-1994 i 1995-2011. Kljucne reci: Oporezivanje, Sigma konvergencija, Konvergencija klasa, Evropska Unija.

Strategic local tax interactions: Does quality of life matter?

The aim of this paper is to study the role of municipal quality of life as a driver of tax strategic interactions among local governments. The analysis is focused on the two main local taxes in Spain - property tax and motor vehicle tax - and on the municipalities above 50,000 inhabitants. Empirical evidence confirms the existence and relevance of such interactions in the property tax. On the contrary, in the case of motor vehicle tax such interaction patterns are not detected.

About International Tax Competition

As Stewart and Webb [1] properly exposed, “the intuition is simple and, at least at the level of popular debate and policy discussion, compelling: when corporations face few barriers to locating in the lowest tax jurisdiction, revenues from corporate taxation will shrink as governments are forced to cut taxes to compete for mobile capital and companies take advantage of increased opportunities for international tax avoidance. The implication is that in an era of economic globalization that is, international economic integration and an accompanying increase in capital mobility governments may find themselves drawn into an internecine ‘race to the bottom’ in capital taxation, undermining the financing of the welfare state and the provision of public goods generally. Further, taxes must then come to fall unduly on immobile factors, specifically labour, exacerbating labour market rigidities and unemployment”.