Paulo José Regis

The Sustainability of European External Debt: What Have We Learned?

In this paper we aim to analyze the level of sustainability of external debt and, more importantly, how it has changed for a number of European economies. Given the severity of the crisis since 2008, we argue that the path of external debt burdens may have changed since the start of the crisis, given the concerns about debt accumulation in most countries. We analyze the reaction of present debt accumulation to past debt stock, incorporating the possibility of endogenously determined structural breaks in this reaction function. We find that structural breaks happen in most cases after 2008, highlighting the importance of the policy measures taken by most governments.

Do Asia and Pacific countries compete in corporate tax rates

Do governments in the emerging Asia and Pacific region independently set corporate tax rates? This paper answers the question and contributes to the growing empirical tax competition literature by (1) generating a predictable tax reaction function considering the ‘lumpy’ nature of economic geography; (2) using GMM to estimate the tax reaction functions using panel data of 14 countries in the Asia and Pacific region between 1980 and 2007. We find evidence of strategic fiscal policy interaction. Globalization has positive effects on the interactive policy setting. Country size has also positive effect but the effects are offset when the openness deepens. Furthermore, a substitution relation between capital and labor is implied. Overtime, countries in the Asia and Pacific region seem to become more competitive in corporate tax rates.

Access to credit and investment decisions of small- and medium-sized enterprises in China

Financial constraints are common in developing countries where financial systems are underdeveloped. In China, firms report that access to finance is the most important obstacle in the business environment. This is related to firms that fail to gain access to the credit market. We examine the likelihood of gaining access to credit by firms, and find that size and exporting appear to be the key characteristics. Credit constraints are significant for investment decisions. Together with size, access to credit is among the firm characteristics with the greatest impact on the likelihood to invest.