University of Bayreuth D-95440 Bayreuth email@example.com
Abstract: The discussion about income versus consumption as the ideal tax base looks back on a long history. In recent years, the debate about income versus consumption as the better tax base reemerged in the United States (2002) and in Germany (2006). In view of the long history of the debate, it is surprising that still relatively little research has been done on cross- border-investments in a cash flow-tax system. The presented article tries to fill this gap. For the case of a harmonized introduction of symmetric cash flow-tax systems in several coun- tries, rules are developed that could guarantee a systematic and feasible treatment of cross- border investments. Preference is given to the RF-base-cash flow-tax on the personal level without a separate company tax. As a result the presented article states, that a coordinated introduction of symmetric cash flow-tax systems in several neighboring countries could be possible. To guarantee the success of the reform, each country must be willing to commit to intensive cooperation in tax matters. A unilateral introduction of a cash flow-tax and the re- sulting clash of a consumption-based tax system with an income-based tax system − the so- called collision-case − will be addressed in a following paper.
South Africa has one of the most disaggregated commodity flow models in the world. The availability of future transport demand on a commodity level informs strategy in an objective way – through intelligence of location and size requirements of long-term freight logistics infrastructure investment decisions. The model results indicate that 50% of corridor freight constitutes break bulk. Internationally, about 80% of break bulk cargo moves in containers; intermodal solutions are therefore a key solution for South Africa’s freight demand challenges. Scenario analysis further indicates that 80% of corridor break-bulk tons can be serviced by only four intermodal facilities – Gauteng, Durban, Cape Town and Port Elizabeth. In addition, the ability to identify target industries based on commodity flows enables collaboration between government (through the state-owned national rail and port operator), industry and logistics service providers to facilitate these infrastructure investments. For example, in 2041, it is predicted that processed foods and chemicals will amount to 44% of break bulk freight on the two largest corridors: Gauteng to Durban and Gauteng to Cape Town.
We believe that this study entails a number of implications that might be important for the empirical literature on financing constraints. First, we show that estimating firm-level sensitivities offers a number of important benefits over the traditional framework of comparing sample-level estimates across groups. As such, we highly support this new approach that might be an important element in the debate on the usefulness of estimating investment-cash flow sensitivities to capture financing constraints. Secondly, we show that investment models with firm-varying slopes can be estimated using modern econometrical techniques. As such, we can compute firm-level sensitivities that take into account the underlying model dynamics and stay close to the original definition, instead of computing mathematical proxies that look mainly at levels of investments and cash flows. Finally, we show that firm-specific sensitivities provide a unique opportunity to investigate the drivers of the sensitivity, thereby opening up the black-box of investment-cash flow sensitivities. Using an ex-post regression offers the possibility to look at marginal effects and to study non-linear effects.
5. Shelter Business Income
Investors who are controlling shareholders of private Canadian corporations can use flow-through investments to shelter the corporation’s income. The tax benefits would be similar to the tax saving and tax deferral benefits available to individual investors. If the corporation has available capital losses, the shareholder may consider investing in Sprott Flow-Through L.P. personally, then exchanging the units of the Flow-Through or shares of the Sprott Resource Class on a tax-free rollover basis for shares of the corporation (subsection 85 (1) of the Income Tax Act, Canada). The disposition proceeds may then be sheltered by the corporation’s available capital losses and, depending on the circumstances, distributed to the shareholder on tax free basis. The effectiveness of any of those strategies depends on the corporation’s specific circumstances, and should be carefully reviewed by a professional tax advisor.
The field lines that start from the financial sources can be assimilated with microcredits for investments, so that the flow of the investment field Ф i is defined by the total number N of microcredits similarly with the number N of electrical field lines in equation (6). If the enclosed surface S containing inside the financial sources from which start the microcredits lines, is considered as money source (money offer), which different investors may do in economic boom periods, then for the investment I can be written an equation similar to equation (6):
These investment deliberations are different stages and foreign funds will flow in during course of the year.
The investment push has come as a result of liberalisation of foreign investment ceiling from 26 per cent to 49 per cent last year through the passage of Insurance Laws (Amendment) Bill last year.
Higher IRR despite lower risk
Not dependent on size (monitoring implications by manager)
No exposure to capital inflows in PE market (for time considered!)
Implication: infrastructure fund investments do have special characteristics that are of interest for institutional investor and thus could help narrowing the infrastructure financing gap
Thus, when a few EU member states started to adopt a disruptive behaviour in debates at EU level, preferring a pro-China stand over the general EU position, the suspect that China was using economic means such as Foreign Direct Investments (FDIs) to influence the EU political process started to spread. Without going as far as claiming that China is willingly using investments to influence the European politics, this paper analyses whether FDIs have a negative impact on the integration process of the EU. Since one of the most famous episodes of disruption regards Greece, which has been a major receiver of Chinese investments in the past few years, this research paper compares Greece with another European country which shares high degrees of similarities with, but which has not shown disruptive behaviour in China- related matters at EU level; Italy, using the most-similar systems design. The results suggest that inbound Chinese investments have a negative impact on the integration process when such investments match the interests of member states, some more than others. Apparently, Greece adopted a disruptive behaviour, while Italy did not, due to the type and conditions of its economy, which is weak and small, but most importantly, it heavily relies on import of capital and goods. Thus, attracting further Chinese capital is more in the interests of the import-oriented Greece than of the export-oriented Italy. Therefore, EU countries sharing similar characteristics could also be negatively influenced by the inflow of Chinese investments, as far as the EU integration process is concerned.
(Refinance) Fund in SIDBI. These Funds were fully utilized to incentivise banks and SFCs to lend to micro and small enterprises (MSEs), by refinancing 50 percent of the incremental lending to MSEs by banks and SFCs during FY 2010 and FY 2011. These funds, provided to banks/SFCs at a very low cost with more that 60 % year mark for the micro enterprises and helped in almost doubling the credit flow to the SIDBI facility the Government of India has allocated a Fund of ` 5000 crore in Union Budget 2011-12. The Sub -Group I, while considering its recommendation to increase the outstanding credit to MSME sector by 25% per annum during the 12 th Plan, as also to stimulate the sector which contribute almost 40% of total industrial manufacturing, the Sub-Group recommended that the amount as allocated may be increased gradually @ minimum ` 1,000 crore per year to reach allocation of ` 10,000 crore by the end of the 12 th Five Year Plan.
Most of the Nigerian government’s transformation agenda is geared toward creating and enabling business environments to attract foreign direct investment. Opinions are divided as to the impact of foreign investment on trade and this researcher believed it could be either positive or negative. Hence, this research is to ascertain the magnitude of foreign investment’s impact on Nigeria’s bilateral trade. Integrating foreign direct investment in the gravity model, we applied the PPML technique because of its robustness and ability to recognise zero trade. We segregated foreign investment into three-flow, stock and its annual growth. Our estimation revealed that foreign direct investment stock impacts negatively on bilateral trade flow in Nigeria for both exports and imports and it is robust with the overall sample. Exporters’ foreign direct investment inflow was also revealed to have an impact on bilateral trade in Nigeria. But in all ramifications the magnitude of the negative impact is relatively small but statistically significant reflecting that trade and inward foreign investment are at least substitutes. Nigeria should further encourage inward foreign investment to further stimulate economic growth and aid in creating import substitution.
The MVV Energie Group has no difficulty in covering its liquidity requirements. With an adjusted equity ratio of 36.0 %, we have been and are still able to maintain a high tempo of investment in the current financial year and to obtain a balanced mix of financing for investment projects. Investments in our existing business are predominantly funded from depreciation. For growth projects, we draw on the operating cash flow and optimised project-specific financing facilities. Moreover, we pool structurally similar projects with comparable terms and take up the necessary funds on the capi- tal market or draw on our liquid funds. As alternatives to the bank market, we are monitoring further sources of financing, such as the bond market. We have defined various key figures as guidelines for our debt-financed growth and also comply with these. This way, we continue to ensure an implicit rating on investment grade level for the MVV Energie Group.
Assistant Professor, Department of Commerce CMS College Kottayam (Autonomous)
With the gradual abolishment of barriers on capital inflow, there has been a surge of investment into the Indian economy. A significant impact of foreign investment has always been felt on the stock market indices which tend to vary according to its flow. This paper investigates whether Foreign Institutional Investment influences BSE SENSEX. An attempt has also been made to study whether there is any reverse influence. To study the direction of influence, Granger Causality Test has been used. To analyze the influence between the variables, daily data of both Foreign Institutional Investments and BSE SENSEX was considered. The time horizon was 7 years, from 2010 to 2016.
Thirdly, it is helpful to calculate the unobservable equilibrium stock. A positive and less than unity supports the self-reinforcement effect and the dynamic adjustment of China’s OFDI.
According to the literature, prior IFDI might have influence on OFDI and the home country effect is important for the OFDI location choice, we have lnCIFDIS i,t-1 which means the previous stock of IFDI from country i at time t-1 in China. There are two reasons to use the lagged stock value to capture potential externality. Firstly, Driffield and Love (2003) also argue that the stock of IFDI rather than its flow is more likely to include cumulative knowledge. Similarly, it can be assumed that IFDI stock takes time to generate externality (including knowledge, experience, business networks establishment, entrepreneurship etc.) and it also takes time for IFDI to have an effect on OFDI. There are many restrictions to prohibit this externality generation. However, they diminish over time. Therefore, IFDI stock is more likely to generate positive externality to promote OFDI. Secondly, the lagged value is introduced to avoid any spurious correlation. Oulton (1996) and Driffield and Love (2003) demonstrate that using lagged IFDI can tightly define spillovers. It is less likely that contemporaneous residuals will relate to previous IFDI and hence the estimation is not spurious. If we use the contemporaneous value of IFDI stock, unobserved factors left in the error term may simultaneously affect contemporaneous IFDI and OFDI. They may take the form of a common shock, though. For example, the liberalisation of foreign economic policy may simultaneously stimulate IFDI and OFDI. Overall, one-year lagged values of IFDI stock are introduced to present the correlation between China’s IFDI and OFDI. However, we also noted that the lagged IFDI stock variable is an aggregate measure of IFDI which does not allow us to understand the mechanisms through which the effect takes place. It does not allow us to look at the effect which might vary across, for example, sector and entry mode of IFDI.
Recently, more attention has been paid to the issues of firms’ cash holdings and their effective elements. Precautionary motive of keeping the cash holdings proves that firms are required of cash holdings in order to financially provide new investments and pay back matured liabilities (Bao et al., 2012). As a matter of fact, cash holdings avoid unreasonable costs with financing when confronting shortcomings in firm’s liquidity. Almeida et al. (2004) posited a new model based on which they hypothesized that financially constrained firms have a positive cash flow sensitivity of cash, while unconstrained firms’ cash savings should not be systematically related to cash flows. They investigated the effect of financial constraints by the firm’s propensity to save cash out of cash flows (the cash flow sensitivity of cash). Riddick and Whited (2009) theoretically and experientially found that saving and cash flow are negatively related. Bao et al. (2012) supported the hypothesis that firms have different levels of responses to their cash holdings when facing positive and negative cash flows. Possibility of cash flow paucity is different due to the level of cash holdings (Fualkender and Wang, 2006).
Businesses are all about trade, the exchange of value between two or more parties, and cash is the asset needed for participation in the economic system. For this reason, while some industries are more cash intensive than others, no business can survive in the long run without generating positive cash flow per share for its shareholders. To have a positive cash flow, the company's long-term cash inflows need to exceed its long-term cash outflows. An outflow of cash occurs when a company transfers funds to another party. Such a transfer could be made to pay for suppliers and creditors, employees, or to purchase long-term assets and investments, or even pay for legal expenses and lawsuit settlements. It is important to note that legal transfers of value through debt, like a purchase made on credit, is not recorded as a cash outflow until the money actually leaves the company. A cash inflow is of course the exact opposite; it is any transfer of money that comes into the company's possession.
Yield oriented alternative investments provide the opportunity for higher long term returns than those typically available from bonds yet still generate sufficient current income to be compatible with the objectives of the Post Fund. Typically, these investments (e.g., business loan participations, mortgage loan participations and income producing private placements) are structured more like fixed income securities with the opportunity to participate in the appreciation of the underlying assets. While these investments may have an equity component, they display a return pattern more like a bond. As such, they will help reduce the volatility of the total portfolio but also should generate higher returns relative to more traditional bond investments.
Motivation: Driven by an increasingly competitive marketplace, the savviest businesses invest heavily in corporate innovation as a kind of competitive intelligence that gives a business what it needs to operate with poise and precision. The strategy of investments in innovation by firms can potentially explain the heterogeneity of their income increase based on market success. Such a stimulus for growth has been a motivation for the research question being examined in this paper, namely the link between corporate financing and investment decisions of Serbian firms based on the bank loans as sources of innovation and hence improved enterprise performance. The paper is based on the research of Hottenrott et al. (2014), together with Ferrando & Preuss (2017) and Aerts & Schmidt (2008) concerning the relationship between external finance and business innovation activities. This paper provides information about a bank loan as a financing source that firms use to fund their innovative activities, with the research question whether that has the subsequent impact on the company's performance. The idea of the paper is that investments of enterprises in innovation significantly affect their revenue. Data: Empirical research was provided by a survey in Serbia in 2017. The sample comprised 152 enterprises, mostly privately owned, of all sizes. Descriptive statistics: Cronbach's Alpha coefficient, regression analysis is used as the research tool and method. The link between business finance and innovation, and furthermore the link between innovation and income of Serbian firms have been investigated. Three groups of factors show that the degree of income and market success of the enterprise increases with the level of investment in innovative activities. These are: sources of financing and financing conditions as independent variables, and company's income revenues, as the dependent variable. Findings: Firms that use bank loans as financial instruments for innovation activities and investments are more likely to develop new products, methods and processes, and successfully increase their revenues and income based on developing this kind of added value. The findings indicate that tangible asset investment of SMEs is positively related to the use of bank finance, to new product development and to enterprise performance improvement. Contribution: Results of the research show that financial investments in business innovation directly contribute to the business sector performance improvement. They also demonstrate the theory of innovative enterprise, the significance of financing, and the impact of banking on the overall development of the economy. The results point to the need for further research in the area of access to finance, as well as in the parallel development of non-banking sources of financing.
reflected in our empirical assessment, which shows that European regions with similar locational endowments pose a fiercer competitive threat to one another than regions with different locational endowments. However, some regions are more competitive than others in that they pose a relatively higher competitive threat to other regions and at the same time face a relatively limited competitive threat from other regions. Typically, these are large, accessible regions with a skilled labour force and/or low costs of capital and labour. Regional giants such as Greater London and Ile-de-France battle against each other, but they face a low competitive threat from other regions in that they are simultaneously large and sufficiently distinctive. These regions specialise in attracting high value-added investments in financial and business services. Perhaps paradoxically, territorial and regional competition for investments appears fiercest for those foreign investments that have the lowest value added (i.e., efficiency-seeking investments in production plants in low- and medium-tech manufacturing) and that no region really prefers. However, when the location requirements for investments are minimal, the number of regions that are included in the consideration set of a MNC is relatively large. As a MNC can choose from a wide range of locations, it can play governments against each other by asking for tax cuts or subsidies. Hence, a high degree of competition in this market as reflected by the revealed competition measure would also make sense from a substantive point of view.
Measures: As set out in the Description element
Description: Canada or any province, when selling or disposing of its equity interests in, or the assets of, an existing state enterprise or an existing
governmental entity, may prohibit or impose limitations on the ownership of such interests or assets, and on the ability of owners of such interests or assets to control any resulting enterprise, by investors of the other Party or of a non-Party or their investments. With respect to such a sale or other disposition, Canada or any province may adopt or maintain any measure relating to the nationality of senior management or members of the board of directors.