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Begin New Search Content Type Working Paper Publishing Institution United Nations University

81. Profit-shifting behaviour of emerging multinationals from India

Author:
Khanindra Ch. Das
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines the profit-shifting behaviour of emerging multinational firms from India. It is found that the before-tax profitability of subsidiaries differs according to whether they were established directly or via an Offshore Financial Centre (OFC). The impact of the corporate tax rate on profitability is examined using a fixed-effects model for the period 2010–19. In the case of subsidiaries established via OFCs, a negative relationship between corporate tax rate and profitability is found, indicating profit-shifting behaviour. However, a disaggregated investigation by characteristics of parent firms reveals that the negative relationship holds primarily for via-OFC subsidiaries that belong to multinational firms with limited transactions of intangible assets, lower export intensity, and limited dependence on external commercial borrowing. The evidence of profit shifting is not all pervasive. However, in the presence of these transaction channels, multinational firms establish better control over intra-firm resources, which enables the transfer of resources within the multinational firm when the network of subsidiaries is connected through the OFC. The results are robust to the inclusion of economic and institutional factors pertaining to the host country.
Topic:
Finance, Multinational Corporations, Profit, Corporate Tax, and Tax Havens
Political Geography:
South Asia and India

82. Does aid to the productive sectors cause manufacturing sector growth in Africa?

Author:
Alain Ndikumana
Publication Date:
02-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In recent decades, Africa has received a large share of official development assistance compared to other regions of the world. Using AidData for 2000–13, this paper examines the effects of aid to productive sectors on manufacturing growth in Africa. Econometric results show that increased assistance to these sectors is associated with an increase in growth of the manufacturing sector, with complementary effects from allocations to economic services and infrastructures. However, dynamic panel regression results show a positive long-term link between increased official development assistance to productive sectors and growth of the manufacturing sector. These findings make an important contribution to the economic literature where there is controversy over aid effectiveness at the macro level. The findings also have policy implications for allocation of aid between sectors by making rational trade-offs related to their amount and quality, with emphasis on productive sectors where investment has a major impact on growth of the manufacturing industry.
Topic:
Humanitarian Aid, Economic Growth, Manufacturing, and Development Assistance
Political Geography:
Africa

83. Impact of teacher content knowledge on student achievement in a low-income country

Author:
Anna Holvio
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper estimates the causal impact of teacher content knowledge on student achievement in Mozambique, a low-income country where a large share of fourth-graders fail to meet the minimum requirements of literacy and numeracy. I use nationally representative data from the Service Delivery Indicator survey, and exploit within-student across-subject variation in a sample of students taught by the same teacher in maths and Portuguese, thus circumventing bias caused by unobserved student and teacher heterogeneity. I find that, on average, teacher content knowledge does not have an impact on student achievement. However, the impact varies significantly by student’s first language, urban or rural location of the school, and the match of students and teachers in their knowledge.
Topic:
Education, Literacy, and Teachers
Political Geography:
Africa and Mozambique

84. Measuring illicit financial flows: A gravity model approach to estimate international trade misinvoicing

Author:
Lourenço S. Paz
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Illicit financial flows have recently attracted the attention of academia, practitioners, and multilateral organizations who consider them harmful to economic development. Some observers suggest that many of these flows occur via the misinvoicing of international trade transactions. This study develops a novel methodology based on the gravity model of international trade to estimate illicit financial flows using publicly available product-level international trade data. It contributes to the literature by estimating product-level transportation and insurance costs and providing, for the first time, an estimation for all countries of an upper bound of the values of export and of import over- and under-misinvoicing separately, without resorting to assumptions about trade statistics reliability. Application of the methodology is illustrated using six-digit product-level UN Comtrade data for 2013–16. The results indicate that misinvoicing is not confined to a few products or countries but is a widespread phenomenon that deserves future research.
Topic:
International Trade and Finance, Transportation, Illicit Financial Flows, and Misinvoicing
Political Geography:
Global Focus

85. Ethnic dominance and exclusion: Unpacking cross-national data

Author:
Andrea Vaccaro
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
It is widely accepted that the distribution of power between ethnic groups within a country plays a key role in major social, political, and economic outcomes. Researchers working on the topic have various measures of ethnic dominance and exclusion, and other closely related aspects such as ethnic fractionalization, polarization, and heterogeneity, available to them. These measures are, however, often used without sufficient critical reflection and their empirical differences are not entirely understood. The literature does not provide too much guidance either. In fact, efforts to comparatively evaluate data on how power is distributed between ethnic groups are in short supply. To address this gap in the literature, the study at hand provides a comprehensive descriptive analysis of publicly available common cross-national country-level measures on ethnic dominance and exclusion. The findings of this study suggest that Varieties of Democracy’s Exclusion by Social Group and Ethnic Power Relations’ Ethnic Exclusion are more alike than the other measures under scrutiny, yet in general the empirical differences among common measures of ethnic dominance and exclusion are substantial. Scholars should thus reject an ‘any measure will do’ approach when choosing among competing measures.
Topic:
Ethnicity, Data, and Exclusion
Political Geography:
Global Focus

86. Taxless fiscal states: Lessons from 19th-century America and 21st-century China

Author:
Yuen Yuen Ang
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
How do modern fiscal states arise? Perhaps the most dominant explanation, based on the European experience, is that democratic institutions that limited the extractive power of states—exemplified by the 1688 Glorious Revolution in England—paved the way for the rise of fiscal capacity and subsequent prosperity. Revisionist accounts, however, reveal that this dominant narrative is flawed. In fact, numerous factors converged to enable the rise of European fiscal states, and in England, debt and land were particularly salient factors. Building off this literature, I bring attention to the role of ‘taxless public financing’ (i.e. financing public infrastructure through means other than taxation) in the making of fiscal states in two seldom compared cases: 19th-century America and 21st-century China. Both countries relied heavily on taxless financing to launch an infrastructure boom that spurred rapid growth along with massive corruption and financial risks.
Topic:
History, Finance, Tax Systems, and Land
Political Geography:
China, Asia, North America, and United States of America

87. The global inequality boomerang

Author:
Ravi Kanbur, Eduardo Ortiz-Juarez, and Andy Sumner
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper we argue that the decline in global inequality over the last decades has spurred a ‘sunshine’ narrative of falling global inequality that has been rather oversold, in the sense, we argue, it is likely to be temporary. We argue the decline in global inequality will reverse due to changes in the between-country component. We find there is a potentially startling global inequality ‘boomerang’, possibly in the mid-to-late 2020s, which would have happened even if there were no pandemic, and that the pandemic is likely to bring forward the global inequality boomerang.
Topic:
Inequality, Pandemic, and COVID-19
Political Geography:
Global Focus

88. Impact of female peer composition on gender norm perceptions and skills formation in secondary school

Author:
Martina Querejeta
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper examines peer effects on students’ gender norm perceptions and skills formation. I use a Uruguayan nationally representative survey of 9th grade students and exploit the quasi-random variation in the proportion of female peers across classes within schools for causal identification. Results show that a higher exposure to female peers in the class leads to more progressive gender norms. Furthermore, these effects in gender perceptions are driven mostly by male students. Female students are also impacted by peers’ sex composition and significantly reduce the time devoted to domestic work and improve mathematics scores when exposed to more female peers. No effects on language were found for either sex. Thus, exposure to female peers operates not only by reducing traditional gender perceptions but also by changing actual behaviour regarding housework and academic performance of female students. My results suggest that short peer interactions in secondary school contexts may have substantial effects on reducing gender stereotypes and change gendered behaviours among students.
Topic:
Developing World, Inequality, Peer Effects, and Gender Norms
Political Geography:
Global Focus

89. Monetary policy in South Africa, 2007–21

Author:
Patrick Honohan and Athanasios Orphanides
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This paper reviews South Africa’s monetary policy since 2007 and makes recommendations towards improving the inflation-targeting framework currently in place. Following a surge in inflation into double digits in 2007/08, the South African Reserve Bank managed to guide inflation in line with the 3–6 per cent target band. Estimates of South Africa’s potential output underwent successive downward revisions. The resulting output gap misperceptions contributed to the tendency of inflation to be closer to the upper edge of the band in the 2010s. Our assessment is that the current definition of the target is not ambitious enough and reduces the benefits that inflation targeting could otherwise provide. An eventual point target of 3 per cent would better promote growth and protect the value of the currency, as mandated by the Republic’s Constitution.
Topic:
Monetary Policy, Economy, History, and Inflation
Political Geography:
Africa and South Africa

90. Two decades of Tanzanian health policy Examining policy developments and opportunities through a gender lens

Author:
Roosa Lambin and Milla Nyyssölä
Publication Date:
03-2022
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Tanzania has undertaken important health sector reforms in the new millennium, and the most recent Health Sector Strategic Plan (2021–26) lays out ambitious targets to achieve universal health coverage. Yet, women in Tanzania continue to face significant barriers in accessing healthcare and the country is grappling with important gender-biased health challenges disadvantaging women. The aims of this paper are two-fold. First, we examine the evolution of Tanzania’s health policy over the past two decades (2000–21) from the perspective of enhancing financial protection for working-age women. Second, we explore policy options for genderresponsive health insurance expansion in the context of Tanzania. Methodologically, the paper draws on a scoping study of diverse literature and data and a review of evidence from other contexts with public health insurance schemes. We find that Tanzania has a fragmented health system that relies on several independent schemes introduced throughout the years, characterized by insufficient risk-pooling. Such a system provides insufficient financial protection for workingage women and female-headed households, which are financially less secure than dual-earner households. Although expanding health insurance coverage represents a viable corrective measure, future reforms must account for women’s lower financial contribution capacity to enable equitable access. Additionally, the policy design requires gender-mainstreamed investments in awarenessraising, service quality, and benefit packages.
Topic:
Health Care Policy, Reform, Women, Finance, and Health Insurance
Political Geography:
Africa and Tanzania