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Rebecca Lester - One of the best experts on this subject based on the ideXlab platform.

  • made in the u s a a study of firm responses to Domestic Production incentives
    Journal of Accounting Research, 2019
    Co-Authors: Rebecca Lester
    Abstract:

    How do U.S. companies respond to incentives intended to encourage Domestic Production and manufacturing? I study this question in the context of the Domestic Production Activities Deduction (DPAD), which was enacted in the American Jobs Creation Act of 2004 and is currently the third largest U.S. corporate tax expenditure. Specifically, I examine 1) whether and to what extent firms shift income to maximize the Domestic manufacturing benefit, and 2) the extent that firms actually increase Domestic investment and employment, measured using confidential data from the U.S. Bureau of Economic Analysis. While I find a positive effect of DPAD on Domestic investment, I also find that DPAD firms shift income across time and (to a lesser extent) across borders to maximize the tax benefit. These results show that changes in firm reporting are an important and economically significant response that has not been studied previously in this context. Additionally, these findings inform the ongoing policy debate on the possible extension or repeal of this tax incentive.

  • Made in the U.S.A.? A Study of Firm Responses to Domestic Production Incentives
    Journal of Accounting Research, 2019
    Co-Authors: Rebecca Lester
    Abstract:

    How do U.S. companies respond to incentives intended to encourage Domestic Production and manufacturing? I study this question in the context of the Domestic Production Activities Deduction (DPAD), which was enacted in the American Jobs Creation Act of 2004 and is currently the third largest U.S. corporate tax expenditure. Specifically, I examine 1) whether and to what extent firms shift income to maximize the Domestic manufacturing benefit, and 2) the extent that firms actually increase Domestic investment and employment, measured using confidential data from the U.S. Bureau of Economic Analysis. While I find a positive effect of DPAD on Domestic investment, I also find that DPAD firms shift income across time and (to a lesser extent) across borders to maximize the tax benefit. These results show that changes in firm reporting are an important and economically significant response that has not been studied previously in this context. Additionally, these findings inform the ongoing policy debate on the possible extension or repeal of this tax incentive.

  • Made in the U.S.A.? A Study of Firm Responses to Domestic Production Incentives
    2019
    Co-Authors: Rebecca Lester
    Abstract:

    How do U.S. companies respond to incentives intended to encourage Domestic manufacturing? I study the Domestic Production Activities Deduction (DPAD), which was enacted in the American Jobs Creation Act of 2004 and was the third largest U.S. corporate tax expenditure as of 2017. Using confidential data from the U.S. Bureau of Economic Analysis, I find greater average Domestic investment spending of $143.6-$146.8 million, but only within the sample of Domestic-only firms and not until 2010, when the greatest statutory DPAD benefits were available. Additional evidence suggests that U.S. multinational claimants invest abroad rather than in the U.S. and that the increased investment by DPAD firms is accompanied by a reduction in the Domestic workforce, consistent with a substitution of capital for labor. I show that the delayed investment response is due to firms engaging in other responses first, such as changing corporate reporting to shift income across time and borders. Quantifying the extent of these effects contributes to the literature that studies this tax deduction and informs policy makers as to the effectiveness of both manufacturing incentives and U.S. corporate income tax rate reductions in stimulating real Domestic activity.

  • made in the u s a a study of firm responses to Domestic Production incentives
    Research Papers, 2019
    Co-Authors: Rebecca Lester
    Abstract:

    How do U.S. companies respond to incentives intended to encourage Domestic manufacturing? I study the Domestic Production Activities Deduction (DPAD), which was enacted in the American Jobs Creation Act of 2004 and was the third largest U.S. corporate tax expenditure as of 2017. Using confidential data from the U.S. Bureau of Economic Analysis, I find greater average Domestic investment spending of $143.6-$146.8 million, but only within the sample of Domestic-only firms and not until 2010, when the greatest statutory DPAD benefits were available. Additional evidence suggests that U.S. multinational claimants invest abroad rather than in the U.S. and that the increased investment by DPAD firms is accompanied by a reduction in the Domestic workforce, consistent with a substitution of capital for labor. I show that the delayed investment response is due to firms engaging in other responses first, such as changing corporate reporting to shift income across time and borders. Quantifying the extent of these effects contributes to the literature that studies this tax deduction and informs policy makers as to the effectiveness of both manufacturing incentives and U.S. corporate income tax rate reductions in stimulating real Domestic activity.

  • which companies use the Domestic Production activities deduction
    2016
    Co-Authors: Rebecca Lester, Ralph Rector
    Abstract:

    This paper uses IRS C corporation 2012 tax return data to study the firms that claim the Sec. 199 deduction, thereby providing empirical evidence on the economic significance of the deduction and the characteristics of the companies that benefit from this incentive. The descriptive analyses show that, while the number of firms claiming Sec. 199 benefits is small, these firms are an economically important subset of all corporate firms and report over half of total positive corporate taxable income. Furthermore, corporations report that approximately $440 billion of taxable income qualifies for the deduction, equal to one-third of all corporate taxable income. Additional analyses show that approximately 72% of the deduction is claimed by large, multinational public firms with assets greater than $1 billion. While described as a tax deduction for Domestic producers and manufacturers, only 60% of the deduction is claimed by firms in industries traditionally considered to generate Production-related income. The statute has thus been applied widely by a number of firms in other industries who have identified some portion of their business that generates qualifying income. We also present data on how the statutory limitations within Sec. 199 reduce the number and extent to which firms claim the deduction, and we show how the number of firms and the amount of benefit claimed has changed over time.

Alper H. Yagci - One of the best experts on this subject based on the ideXlab platform.

Geoffrey Woolcock - One of the best experts on this subject based on the ideXlab platform.

  • enacting food sovereignty values and meanings in the act of Domestic food Production in urban australia
    Local Environment, 2014
    Co-Authors: Nicolette Larder, Kristen Lyons, Geoffrey Woolcock
    Abstract:

    This article brings to light one aspect of alternative agri-food practices by exploring the values and meanings Domestic food producers associate with their actions, thereby making a small contribution to increasing understanding of the act of urban backyard food Production. While Australian backyards have long been productive spaces, there has been little examination of this phenomenon in the Australian context. Limited quantitative data give some insight into the extent of Domestic Production, and while there is an increasing interest in certain aspects of the local food system, including community gardens and farmers markets, there is a dearth of literature that explores the contemporary act of Domestic Production. This work seeks to situate the act of Domestic Production within the broader movement calling for change within the global food system, particularly that being articulated by the food sovereignty movement. Drawing on Gibson–Graham's diverse economies framework, and through interviews with ei...

Rolf Weder - One of the best experts on this subject based on the ideXlab platform.

  • Trade in Variety and Domestic Production: Evidence from US Manufacturing
    Canadian Journal of Economics Revue canadienne d'économique, 2016
    Co-Authors: Ulf Lewrick, Lukas Mohler, Rolf Weder
    Abstract:

    Welfare gains from increasing product variety are an important source of the gains from international trade. Previous empirical studies, however, typically focus on measuring gains from imported varieties. This paper introduces a measure to analyze changes in Domestically produced varieties to estimate the total variety gains. Our analysis suggests that, for US manufacturing, losses in Domestic varieties from 1992 to 2006 seem substantial given the large decline in the number of US establishments. Yet, once we account for the reallocation of resources towards large multi-variety firms, we find considerable Domestic variety gains, adding to those from imported varieties

  • International Trade in Variety and Domestic Production
    2011
    Co-Authors: Ulf Lewrick, Lukas Mohler, Rolf Weder
    Abstract:

    Welfare gains from increasing product variety are an important source of the gains from international trade. Recent empirical studies have largely focused on measuring the gains from an increased variety of imports. Trade theory, however, suggests that international trade heavily affects the variety of Domestically produced goods as well. To overcome the typical data limitations on Domestic varieties, we employ the number of Domestic establishments as a proxy of the number of Domestic varieties and include information on business dynamics to assess the importance of new and disappearing varieties. Our results suggest that for U.S. manufacturing, losses in Domestic varieties from 1992 to 2006 are substantial and outweigh the gains from increased imported varieties.

  • Trade in Variety and Domestic Production Preliminary version { comments welcome
    2010
    Co-Authors: Ulf Lewrick, Lukas Mohler, Rolf Weder, Peter Merian-weg
    Abstract:

    Gains from variety are an important source of the gains from trade. Even though a comprehensive assessment of the gains from variety requires to account for the change of both imported and Domestically produced varieties, the emphasis of empirical studies so far has been on the former. Using U.S. data from 1992 to 2007, we show in this paper that ignoring the change in Domestic varieties may lead to a substantial overestimation of the gains from variety. We use the number of Domestic establishments as a proxy for the number of produced varieties and take into account changes in the intensive margin. Based on this analysis, we nd that the gains from an increase in imported varieties have to be corrected downwards by a magnitude two thirds.

Emmanuel Dhyne - One of the best experts on this subject based on the ideXlab platform.

  • Trade and Domestic Production Networks
    The Review of Economic Studies, 2020
    Co-Authors: Emmanuel Dhyne, Magne Mogstad, Ayumu Ken Kikkawa, Felix Tintelnot
    Abstract:

    Abstract We examine how many and what kind of firms ultimately rely on foreign inputs, sell to foreign markets, and are affected by trade shocks. To capture that firms can trade indirectly by buying from or selling to Domestic firms that import or export, we use Belgian data with information on both Domestic firm-to-firm sales and foreign trade transactions. We find that most firms use a lot of foreign inputs, but only a small number of firms show that dependence through direct imports. While direct exporters are rare, a majority of firms are indirectly exporting. In most firms, however, indirect export is quantitatively modest, and sales at home are the key source of revenue. We show that what matters for the transmission of foreign demand shocks to a firm’s revenue is how much the firm ultimately sells to foreign markets, not whether these sales are from direct or indirect export.

  • trade and Domestic Production networks
    National Bureau of Economic Research, 2018
    Co-Authors: Felix Tintelnot, Ayumu Ken Kikkawa, Magne Mogstad, Emmanuel Dhyne
    Abstract:

    We use Belgian data with information on Domestic firm-to-firm sales and foreign trade transactions to study how international trade affects firms' unit cost and the consumer's real wage. We show theoretically that the gains from trade depend on Domestic firm-to-firm linkages. Furthermore, we develop a tractable model of endogenous network formation, allowing firm-to-firm connections to form or break in response to import price changes. Quantitatively, we find that for small import price changes, alternative models that assume a roundabout Production structure, despite falsely implying that all firms are connected within one link, yield similar predictions for the change in the real wage to the model that fits the actual linkages between firms. For large changes in the price of foreign goods, both the existing network structure and the endogeneity of the connections between firms are found to be quantitatively important.

  • Trade and Domestic Production Networks. National Bank of Belgium Working Paper No. 344
    2018
    Co-Authors: Felix Tintelnot, Ayumu Ken Kikkawa, Magne Mogstad, Emmanuel Dhyne
    Abstract:

    We use Belgian data with information on Domestic firm-to-firm sales and foreign trade transactions to study how international trade affects firm efficiency and real wages. The data allow us to accurately construct the Domestic Production network of the Belgian economy, revealing several new empirical facts about firms’ indirect exposure to foreign trade through their Domestic suppliers and buyers. We use this data to develop and estimate models of Domestic Production networks and international trade. We first consider a model of trade with an exogenous network structure, which gives analytical solutions for the effects of a change in the price of foreign goods on firms’ Production costs and real wages. To examine how gains-from-trade calculations change if buyer-supplier links are allowed to form or break in response to changes in the price of foreign goods, we next develop a model of trade with endogenous network formation. We take both models to the data and compare the empirical results to those we obtain using existing approaches. This comparison highlights the relevance of data on and modeling of Domestic Production networks in studies of international trade.