Theoretical and Applied Economics
No. 2 / 2010 (543)
On the Intensity of International Subsidy Competition for FDI
Charles University and Czech National Bank, Prague
Zuzana IRŠOVÁ
Charles University, Prague
Abstract. The objective of this paper is to empirically assess the recently introduced models of subsidy competition based on the classical oligopoly theories. Three crucial scenarios (coordination, weak competition, and fierce competition) are tested employing iteratively re-weighted least squares, fixed effects, and dynamic Blundell-Bond estimator on the data from the World Competitiveness Yearbook. The results suggest that none of the scenarios can be strongly supported – although there is some weak support for cooperation –, and thus that empirical evidence is not in accordance with the tested models. There is no evidence for a significant international competition for FDI. It seems that, however, by means of FDI incentives, governments try to compensate foreign investors for high wages and low productivity of their countries’ labor force.
Contents
The Role of Stress-test Scenarios in Risk Management Activities and in the Avoidance of a New Crisis
On the Intensity of International Subsidy Competition for FDI
About How Did the First Ever Big Economic Crisis Look Like
The Role of Empathy in Developing the Leader’s Emotional Intelligence
The Health of the Economy as a Living Organism
The Role of Internal Audit in Optimization of Corporate Governance at the Groups of Companies
Banking Risk Management in the Light of Basel II
A Historical Approach of the Population Role in the Economic Development (Ancient period – the nineteenth century)
The Liability of the Employer and the Liability of the Employees between Civil Law and Labour Law