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Archive for the ‘globalization’ Category

Trade Patterns in the 2060 World Economy

January 15, 2015 Comments off

Trade Patterns in the 2060 World Economy
Source: OECD

This paper presents long-term trade scenarios for the world economy up to 2060 based on a modelling approach that combines aggregate growth projections for the world with a detailed computable general equilibrium sectoral trade model. The analysis suggests that over the next 50 years, the geographical centre of trade will continue to shift from OECD to non-OECD regions reflecting faster growth in non-OECD countries. The relative importance of different regions in specific export markets is set to change markedly over the next half century with emerging economies gaining export shares in manufacturing and services. Trade liberalisation, including gradual removal of tariffs, regulatory barriers in services and agricultural support, as well as a reduction in transaction costs on goods, could increase global trade and GDP over the next 50 years. Specific scenarios of regional liberalisation among a core group of OECD countries or partial multilateral liberalisation could, respectively, raise trade by 4% and 15% and GDP by 0.6% and 2.8% by 2060 relative to the status quo. Finally, the model highlights that investment in education has an influence on trade and high-skill specialisation patterns over the coming decades. Slower educational upgrading in key emerging economies than expected in the baseline scenario could reduce world exports by 2% by 2060. Lower up-skilling in emerging economies would also slow-down the restructuring towards higher value-added activities in these emerging economies.

‘Competitiveness’ Has Nothing to Do With It

January 7, 2015 Comments off

‘Competitiveness’ Has Nothing to Do With It
Source: Social Science Research Network

The recent wave of corporate tax inversions has triggered interest in what motivates these tax-driven transactions now. Corporate executives have argued that inversions are explained by an “anti-competitive” U.S. tax environment, as evidenced by the federal corporate tax statutory rate, which is high by international standards, and by its “worldwide” tax base. This paper explains why this competitiveness narrative is largely fact-free, in part by using one recent articulation of that narrative (by Emerson Electric Co.’s former vice-chairman) as a case study.

The recent surge in interest in inversion transactions is explained primarily by U.S. based multinational firms’ increasingly desperate efforts to find a use for their stockpiles of offshore cash (now totaling around $1 trillion), and by a desire to “strip” income from the U.S. domestic tax base through intragroup interest payments to a new parent company located in a lower-taxed foreign jurisdiction. These motives play out against a backdrop of corporate existential despair over the political prospects for tax reform, or for a second “repatriation tax holiday” of the sort offered by Congress in 2004.

Business Bribery Risk Assessment

December 30, 2014 Comments off

Business Bribery Risk Assessment
Source: RAND Corporation

Key Findings

Multinational companies often have inadequate tools for judging business bribery risk; they frequently rely on aggregate, general corruption indexes that may not provide sound information on which to base decisions.

  • The lack of good information on bribery risk can lead to less-than-adequate compliance programs, exposing firms to the potential risk of violating anti-corruption laws, or to an overly aggressive and costly approach.

Business leaders and other stakeholders, as well as the literature, identified specific information needed to provide a balanced and objective view of business bribery risk.

  • The types of information required included (1) difficulty of doing business; (2) need for interactions with government; (3) the relevant anti-bribery laws and regulations; (4) information concerning enforcement of domestic and international anti-bribery laws and regulations; (5) a measure of government transparency and quality, including budgetary transparency; (6) information about a government’s civil service quality and management; and (7) civil society oversight, including the role of the press and media.

A ‘Freer’ Flow of Skilled Labour within ASEAN: Aspirations, Opportunities, and Challenges in 2015 and Beyond

December 19, 2014 Comments off

A ‘Freer’ Flow of Skilled Labour within ASEAN: Aspirations, Opportunities, and Challenges in 2015 and Beyond
Source: Migration Policy Institute

Countries’ competitiveness, productivity, and growth depend largely on their ability to acquire and use new knowledge and constantly upgrade the skills of their workforces. Many countries do not, however, have the educational systems necessary to cultivate the kind of workforces they need, and in developing countries it is common for the most highly skilled workers to emigrate for job opportunities abroad.

Over the past decade, the Association of Southeast Asian Nations (ASEAN), a political and economic organization of ten countries in Southeast Asia, began to tackle these issues directly. In 2007, ASEAN Member States agreed to fast-track the creation of the ASEAN Economic Community (AEC) by 2015, which is meant to transform the region into a single market and production base characterized by, among other things, a free flow of skilled labor. In response to the mounting evidence that migrants in the region lack the skills recognition required to put their knowledge and training to use in destination countries, ASEAN Member States are taking steps toward better qualifications recognition to prevent the resulting waste of human capital.

Global Risk 2014-2015: Building the Transparent Bank

December 16, 2014 Comments off

Global Risk 2014-2015: Building the Transparent Bank
Source: Boston Consulting Group

  • The new era of bank transparency will require competitive, structural, and operational adjustments in order to succeed.
  • For the first time since 2007, global banking has regained overall profitability on a global scale, with sharp divergence among regions.
  • Increases in global profit were driven by the positive performance of banks in North America as well as the Middle East and Africa.
  • Banks must establish a comprehensive control framework, based on the three-lines-of-defense model, to reduce nonfinancial risks such as fraud, misconduct, and reputational damage.

EU — Acquisition of citizenship statistics

December 16, 2014 Comments off

Acquisition of citizenship statistics
Source: Eurostat

This article presents recent statistics on the acquisition of citizenship in the European Union (EU).

In 2012, 818 100 people obtained citizenship of an EU-28 Member State, an increase of 4.0 % compared with 2011; More people had acquired the citizenship of an EU Member State than in any other year during the period from 2002 to 2011. The main contribution to the increase at EU level came from United Kingdom (+16 300), followed by Ireland (+14 300) and Sweden (+13 500). The increase in Ireland, however, is a consequence of the efforts in the past two years to reduce the backlog of citizenship applications.

Most new citizenships in 2012 were granted by the United Kingdom (193 900 or 24 %), Germany (114 600 or 14 %), France (96 100 or 12 %), Spain (94 100 or 12 %) and Italy (65 400 or 8.0 %).

Of those acquiring citizenship of an EU-28 Member State, 87 % had previously been citizens of non-EU countries. Of these, citizens of Morocco and Turkey made up the highest numbers, followed by citizens of India, Ecuador and Iraq.

Finance and Social Responsibility in the Informal Economy: Institutional Voids, Globalization and Microfinance Institutions

December 12, 2014 Comments off

Finance and Social Responsibility in the Informal Economy: Institutional Voids, Globalization and Microfinance Institutions
Source: Social Science Research Network

We examine the heterogeneous effects of globalization on the interest rate setting by microfinance institutions (MFIs) around the world. We consider MFIs as a mechanism to overcome the institutional void of credit for small entrepreneurs in developing and emerging economies. Using a large global panel of MFIs from 119 countries, we find that social globalization that embraces egalitarian institutions on average reduces MFIs’ interest rates. In contrast, economic globalization that embraces neoliberal institutions on average increases MFIs’ interest rates. Moreover, the proportions of female borrowers and of poorer borrowers negatively moderate the relationship between social globalization and MFI interest rate, and positively moderate the relationship between economic globalization and MFI interest rate. This paper contributes to understanding how globalization processes can both ameliorate and exacerbate challenges of institutional voids in emerging and developing economies.

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