Whose Connectivity Matters? Internet access and export volumes (Job Market Paper)

This paper presents evidence that suggests the Internet stimulated a country's exports and world aggregate trade between the years 1998 and 2004. Using the 2 stage-least-square estimation of gravity model, I find that a 10-percentage point increase in the number of web hosts in an exporting country leads to about a 0.12-percentage point increase in a country�s export volume. However, the web hosts in importing country are not statistically correlated with the export volume, and there is no evidence of proximity-biased export volume as predicted by a theoretical model. To ensure that the Internet is one of the aggregate trade drivers, I investigate the impact of the Internet on trade openness. The result indicates that a 10-percentage point increase in the number of web hosts in a country leads to a roughly 0.22-percentage point increase in aggregate trade volume.

Transfer Pricing: Does The Size and Remoteness of Countries Matters?

This paper examines evidence of multinational firms� transfer pricing behavior in response to their geographical location for a selection of 52 countries between the years 1978 and 2002. I use the method proposed by Bartelsman and Beetsma (2003) to disentangle the income shifting effects from the effects of tax rates on real production activity. After adding transportation costs to the model, I find that the country sensitivity of transfer pricing is higher for countries with high wage rates and that are close to their major markets. I also find evidence that differences in corporate tax rates induce firms to decrease their transfer prices. This behavior leads to income shifting that gives rise to a loss in tax revenue.

Recycling Impact on Import Substitution and Export Volume

(Working in progress)...