Greta Falavigna (p), Roberto Ippoliti

This work aims at shedding new lights on the relation between bankruptcy enforcement and firms’ dynamics. The risk of bankruptcy is a relevant topic with significant effects on the market and the society. On the one hand, there is the necessity to defend creditors’ rights against debtors’ insolvency while, on the other one, there is the necessity to support the national economic system and its reputation on the global market. Considering the Italian manufacturing industry (more than 250,000 observations) and a panel of 3 years (from 2014 to 2016), authors investigate the relation between the time necessary to define a bankruptcy case by courts and the time necessary to re-pay debts by enterprises. In particular, we test the hypothesis that the efficiency in enforcing debtors’ obligations can affect the decision to submit an instance of bankruptcy by creditors, increasing the delay of payments.
According to results, ceteris paribus, there is a statistically significant positive relation between bankruptcy enforcement and payment periods, confirming the key role of judiciary in firms’ dynamics. Indeed, decreasing the time necessary to define a bankruptcy case by 10 %, we can expect to decrease the payment periods by 0.5%. The policy implications of this result could be relevant. Indeed, the policy maker can reform the national bankruptcy law and its current procedure to support the national economic growth, without additional costs for the public budget.

Alexandre Porsse (p)

The Brazilian taxation system is very complex and fragmented among national e subnational governments, being a source of allocative distortions and inefficiency. Federal government controls most of the tax instruments while subnational governments (states and municipalities) have few tax instruments to be managed. Also, there is a lack of vertical and even horizontal coordination among tax policies which can compromise the effectiveness of changing tax structure. This paper aims to assess the sectoral and welfare impact of changes in three tax instruments (VAT, labor and income taxes) which have been changed by federal government over the last three decades. First, we use a tax function equation to identify the behavior dynamic of changes in those tax instruments. Second, we introduce the tax reaction function into a CGE model in order to simulate the effects of changing tax structure. The simulation exercises mimic the historical changes promoted by federal government in those tax instruments. Preliminary results suggest that changes in those tax rates imply reduction in household welfare and heterogeneous effects on the sectoral productive structure. Additionally, the spatial pattern of sectoral specialization and vertical linkages among government are channels by which such policies have relevant regional impacts.

Vífill Karlsson (p), Grétar Thór Eythórsson

This paper examines the change of local housing prices following municipal amalgamations. Interregional migrations are mostly triggered by differentials in household utilities and local economic conditions, amenities and the like. Thus, it is reasonable to believe that if an amalgamation of municipalities that leads to a better service or lower local taxes in a community would improve the economic and even social welfare of present inhabitants and possibly attract new ones - as suggested by Tiebout (1956). It would reflect in the housing prices as suggested in the theory regarding the bid-rent curve, that are based on thory of von-Thunen (1826). In this paper, I examine the municipalities amalgamations in Iceland and whether it influences local house prices, in order to confirm their success. Due to consumer preference for access over amenity value, there is a spatial disparity of housing prices and it reflects the value of locations. The bid-rent curve is a framework frequently used to capture this spatial structure of housing prices and local amenities and other hard detacable values (Case & Mayer, 1996; Kiel & Zabel, 1996). The economic impact of municipalities amalgamation has not been investigated, as in this paper. I will examine whether this relationship exists. A macro panel data from Iceland will be used. It represents several essential variables of the house market for 79 municipalities in Iceland during the period from 1981 through 2006.