Browsing Department of Economics (ECON) by Title
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Blomgren-Hansen, Niels (København, 1999)[More information][Less information]
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effekter af at harmonisere selskabslovgivningen i EUBennedsen, Morten; Nielsen, Kasper (København, 2002)[More information][Less information]
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Lund, Diderik (København, 2003)[More information][Less information]
Abstract: Abstract Lund (2002a) showed in a CAPM-type model how tax depreciation schedules affect required expected returns after taxes. Even without leverage higher tax rates implied lower betas when tax deductions were risk free. Here they are risky, and marginal investment is taxed together with inframarginal in an analytical model of decreasing returns. With imperfect loss offset tax claims are analogous to call options. The beta of equity is still decreasing in the tax rate, but increasing in the underlying volatility. The results are important if market data are used to infer required expected returns, and in discussions of tax design. Keywords: Corporate tax, depreciation, imperfect loss offset, decreasing returns, cost of capital, uncertainty URI: http://hdl.handle.net/10398/7643 Files in this item: 1
wpec022003.pdf (341.1Kb) -
Keuschnigg, Christian; Nielsen, Søren Bo (København, 2003)[More information][Less information]
Abstract: In recent years, venture capital has increasingly become a factor in the financing of new firms. We examine how the value of mature firms determines the incentives of entrepreneurs to start up new firms and of venture capitalists to finance and advise them. We examine how capital gains taxes as well as subsidies to start-up costs of new firms affect venture capital-backed entrepreneurship. We also argue that dividend and capital gains taxes on mature firms have important consequences for start-up firms as well. JEL Classification: D82, G24, H24 and H25 Keywords: double moral hazard, entrepreneurship, taxes and venture capital URI: http://hdl.handle.net/10398/7592 Files in this item: 1
cepr nr. 4097.pdf (464.2Kb) -
Raimondos-Møller, Pascalis; Schjelderup, Guttorm; Nielsen, Søren Bo (København, 2006)[More information][Less information]
Abstract: We examine how a multinational’s choice to centralize or de-centralize its decision structure is affected by country tax differentials. Within a simple model that emphasizes the multiple conflicting roles of transfer prices in MNEs — here, as a strategic pre-commitment device and a tax manipulation instrument —, we show that decentralization is preferred in case of small tax differentials, whereas centralization can be more profitable, when tax differentials are large. In essence, the organizational flexibility of MNEs is triggered by the scope for tax minimization. Our analysis allows for both commitment and non-commitment to transfer prices, and for alternative modes of competition. Keywords: Centralized vs. de-centralized decisions, taxes, transfer prices, MNEs. JEL-Classification: H25, F23, L23. URI: http://hdl.handle.net/10398/7509 Files in this item: 1
wp7-2006.pdf (234.3Kb) -
GreenlandVesterø Jensen, Carsten; Nielsen, Søren Bo (København, 2003)[More information][Less information]
Abstract: This paper provides an assessment of Greenland's tax system and contemplates changes that may be undertaken in the future to prepare for greater economic self-reliance and for the country's participation in the wider world economy. At the outskirts of Europe, Greenland is an autonomous part of the Danish kingdom, though currently not a member of EU. However, its cooperation with European countries and its dependency on international trade renders it necessary for the tax system in Greenland to be attuned to developments in the rest of the world. Drawing on a thorough international benchmarking analysis of Greenland's tax system, the paper's special focus will be on the corporate tax system and its interplay with personal taxation, as well on as the system of import duties. In particular, we carry out computations of effective marginal and average corporate tax rates, as well as average effective tax burdens on consumption, labour income and capital income, and compare these to similar measures for EU countries. In addition, we outline how Greenland's economic policy in other areas interferes with tax policy. Especially fishery regulation, management of government-owned companies, and housing policy have major implications for the tax system. Key words: international benchmarking, effective tax rates, Greenland JEL: H20, H25 URI: http://hdl.handle.net/10398/7595 Files in this item: 1
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Nielsen, Søren Bo; Raimondos-Møller, Pascalis; Schjelderup, Guttorm (København, 2001)[More information][Less information]
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Milhøj, Anders; la Cour, Lisbeth Funding (København, 2006)[More information][Less information]
Abstract: We study aggregation - or sample frequencies - of time series, e.g. aggregation from weekly to monthly or quarterly time series. Aggregation usually gives shorter time series but spurious phenomena, in e.g. daily observations, can on the other hand be avoided. An important issue is the effect of aggregation on the adjustment coefficient in cointegrated systems. We study only first order vector autoregressive processes for n dimensional time series Xt, and we illustrate the theory by a two dimensional and a four dimensional model for prices of various grades of gasoline. URI: http://hdl.handle.net/10398/7605 Files in this item: 1
wp14-06.pdf (567.4Kb) -
foreign investment in emerging marketsMøllgaard, H. Peter; Overgaard, Per Baltzer (København, 1998)[More information][Less information]
Abstract: Asymmetric information and fear of acquiring a 'lemon' may explain the paucity of foreign investment in emerging market economies. If investors are uncertain about the profitability of investments, intrinsically inefficient, temporary partnerships or joint ventures may serve as mechanisms through which information is transmitted. Temporary partnerships with joint in- vestments by the domestic firm and the foreign investor, together with a buy-out option to the investor, can be used to separate good and bad invest- ment prospects in equilibrium. However, non-revealing equilibria may exist. Implications for foreign direct investment are traced and briefly related to the experience of transition economies. Keywords: investment, complementary assets, partnerships, joint ventures and licensing, costly signaling JEL: D8, F2, L14, O12 URI: http://hdl.handle.net/10398/7496 Files in this item: 1
1998_10.pdf (1.238Mb) -
the Danish cement industryla Cour, Lisbeth Funding; Møllgård, Peter (København, 2000)[More information][Less information]
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Blomgren-Hansen, Niels (København, 2005)[More information][Less information]
Abstract: Samuelson (1958) analyses a three-period model, whereas Diamod (1965) considers a two-period model. This difference poses the question whether the insights derived by analysing the simple two-period model carry over in the more complicated three-period case. They do. The Samuelson model (no productive capital) has only one positive solution (r = n); however, this root is unstable. The Diamond model (no nonproductive abode of purchasing power) has also only one positive solution; the root is stable but inefficient. In a model with both productive capital and a non-productive abode of purchasing power, the inefficient Diamond solution becomes unstable and the socially optimal solution becomes stable. URI: http://hdl.handle.net/10398/7575 Files in this item: 1
wp15-2005.pdf (130.6Kb) -
Motta, Massimo; Rønde, Thomas (København, 2002)[More information][Less information]
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Monetary Steady StatesGhiglino, Christian; Olai Hansen, Bodil; Tvede, Mich (København, 2000)[More information][Less information]
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Kolm, Ann-Sofie; Larsen, Birthe (Frederiksberg, 2010)[More information][Less information]
Abstract: This paper develops a general equilibrium search and matching model where an underground economy co-exists along with the formal part of the economy. In analyzing how tax and punishment policies a¤ect labour market performance, we find that punishment of infor- mal sector activities induce workers and firms to reallocate towards the formal sector. However, more importantly, we find that this real- location tends to improve e¢ ciency in search, reduce the overall wage pressure, and reduce actual unemployment. URI: http://hdl.handle.net/10398/8209 Files in this item: 1
wp5-2010.pdf (158.2Kb) -
part 1: A graphical expositionUrban, Dieter M. (København, 1998)[More information][Less information]
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RevisitedLund, Diderik (København, 2003)[More information][Less information]
Abstract: Levy and Arditti (1973) introduced depreciable assets into the Modigliani and Miller (1958) model, and analyzed the implications for the cost of capital. Assuming that the firm reinvests indefinitely to maintain a constant expected cash flow, they found that depreciation increases the cost of capital before and after tax. Most of their assumptions are maintained. However, commitment to perpetual reinvestment is in most cases not a reasonable assumption. Without it, depreciation decreases the cost of capital before and after tax. The effect of depreciation is less in absolute value than in Levy and Arditti, but not insignificant. Keywords: Cost of capital, depreciation, corporate taxes JEL classification numbers: G31, H25 URI: http://hdl.handle.net/10398/7583 Files in this item: 1
wpec032003.pdf (138.8Kb) -
[More information][Less information]
Abstract: A number of influential studies have documented a strong value premium for US stocks over the period 1963 to 1990 (Fama and French (1992), Lakonishok et al. (1994)). Stocks with low price-earnings multiples, price-book values and other measures of value are reported to have given a higher mean return than the high multiple growth firms. Work by Basu (1997) and others have shown that the value dominance is also a feature of the earlier market history of the United States. The value premium is reported also to exist in a number of other countries over the period 1975 to 1995 (Fama and French (1998)). The results for these markets are based on Morgan Stanley (MSCI) data. Since these data are softer due to a relatively short time horizon and due to a small number of stocks in some cases down at 10 stocks, the conclusions are likely to be less robust. There is therefore a need for more research on this issue. The purpose of this paper is to report evidence for the Danish stock market and to test whether the value premium is a genuine long-term feature of the market or just a phenomenon that pops up now and then. To research this issue we have collected accounting and stock market data for more than half a century. We report in particular on the insights obtained when portfolios are formed on the basis of the price-earnings multiple. The paper shows that there is a value premium. The paper also analyzes whether the premium is likely to be due to risk (Fama and French (1992,98)) or mispricing as emphasized by the Behavioral Finance School (Chan et al. (2000), Lakonishok et al. (1994) and La Porta et al. (1997)). URI: http://hdl.handle.net/10398/7613 Files in this item: 1
wp20-2005.pdf (293.8Kb) -
Boom, Anette (København, 2007)[More information][Less information]
Abstract: We compare investments in generating capacities of an integrated monopolist with the aggregate investments of two vertically integrated competing firms. The firms invest in their capacity and fix the retail price while electricity demand is uncertain. The wholesale price is determined in a unit price auction where the firms know the level of demand when they bid their capacities. Total capacities can be larger or smaller with a duopoly than with a monopoly. If the two firms select the Pareto dominant equilibrium, then the retail price is always higher and the social welfare lower in the duopoly case. URI: http://hdl.handle.net/10398/7572 Files in this item: 1
wp3-2007.pdf (552.5Kb) -
Waisman, Gisela; Larsen, Birthe (Frederiksberg, 2012)[More information][Less information]
Abstract: We exploit the regional variation in negative attitudes towards immigrants to Sweden in order to analyse the consequences of the attitudes on immigrants welfare. We find that attitudes towards immigrants are of importance: they both affect their labour market outcomes and their quality of life. We interpret the negative effect on wages as evidence of labour market discrimination. We estimate the welfare effects of negative attitudes, through their wage and local amenities, for immigrants with different levels of skills, origin, gender and age. URI: http://hdl.handle.net/10398/8519 Files in this item: 1
Waisman_Larsen_wp2012-4.pdf (542.0Kb) -
Kolm, Ann-Sofie; Larsen, Birthe (København, 2003)[More information][Less information]
Abstract: While examining the macroeconomic effects of increased government control of the informal sector, this paper develops a two-sector general equilibrium model featuring matching frictions and worker- firm wage bargaining. Workers search for jobs in both the formal and the informal sector. We analyse the impact of higher punishment rates and a higher audit rate on labour market performance. We find that a higher punishment rate reduces the size of the informal sector and reduces unemployment. A higher audit rate has an ambiguous impact on unemployment, and may actually increase the size of the underground economy. JEL-codes: H26 Keywords: Tax evasion, underground economy, matching, bargaining, unemployment. URI: http://hdl.handle.net/10398/7487 Files in this item: 1
wpec112003.pdf (294.6Kb)