Linking Deutsche Bundesbank Company Data using Machine-Learning-Based Classification

Schild, Christopher-J.; Schultz, Simone

doi:10.1145/2951894.2951896

Cited by 22 publications

(27 citation statements)

References 7 publications

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“…The second source of employment data is the Microdatabase Direct Investment (MiDi, see Lipponer, 2011;Schild and Walter, 2017), which contains information on all German firms with inward or outward stocks of Foreign Direct Investment (FDI) above a reporting threshold. This threshold has been unchanged since 2002 at a minimum of 10% shares or voting rights in an affiliate with a balance sheet total exceeding e 3 million.…”

Section: Data Sourcesmentioning

confidence: 99%

“…The three micro-level datasets are combined via firm identification numbers, which are identical in SITS and MiDi. They are matched to USTAN via a correspondence table provided by the Deutsche Bundesbank (see Schild et al, 2017), resulting in the new combined dataset. Since USTAN does not cover the full population of German firms, and since by far not all firms are involved in service trade or FDI, the three data sources overlap only imperfectly.…”

Section: Data Preparationmentioning

confidence: 99%

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Service offshoring and firm employment

Eppinger

2019

Journal of International Economics

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Major technological advances have recently spurred a new wave of offshoring in services, which used to be non-tradable. Should service workers in developed countries worry about their jobs? Trade theory has given a nuanced answer to this question, suggesting that efficiency gains from offshoring may counteract direct job losses, which leaves the predicted net effect ambiguous. This paper investigates the employment effects of service offshoring in a newly combined and exceptionally detailed panel dataset, covering almost the entire universe of German firms' service imports over the years 2002-2013. It exploits firm-specific export supply shocks by partner countries and service types as an instrumental variable to find that service offshoring has increased firm employment. In line with the canonical trade in tasks model, the employment gains are greater in firms with higher initial levels of service offshoring.

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Section: Data Sourcesmentioning

confidence: 99%

Section: Data Preparationmentioning

confidence: 99%

Service offshoring and firm employment

Eppinger

2019

Journal of International Economics

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“…In case more than one new affiliate was established in a given year, we compute sums or weighted averages across newly established affiliates using fixed-asset weights.14 Using gross investment avoids problems related to reporting the book value of fixed assets and depreciations, which may in part be related to tax considerations.15 For more details regarding the matching methodology and the quality of the match, seeSchild and Schultz (2016).16 Note that T A i,t−1 (Affiliates) and M N E i,t−1 are set equal to zero in case no such activity is observed, which is naturally the case when firm i is a domestic one.17 Note that for illustration purposes we do not use all information from MiDi inFigure 1, since for reasons of confidentiality, regions with fewer than three parent companies cannot be displayed.…”

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confidence: 99%

The effect of investing abroad on investment at home: On the role of technology, tax savings, and internal capital markets

Goldbach

Nagengast

Steinmüller

et al. 2019

Journal of International Economics

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Research Question The broad consensus among economists in favor of increased international integration through trade and investment openness is based on the assumption that the associated gains outweigh the losses. The foreign activities of multinational enterprises (MNEs) have raised the concern that, at the end of the day, home countries lose, owing to the shift of production and employment abroad. This paper examines the relationship between foreign and domestic investment activity of multinational enterprises. Previous contributions have not found clear evidence on whether the effects of investing abroad are positive or negative. Nichttechnische Zusammenfassung Fragestellung Der allgemeine Konsens unter Ökonomen für eine verstärkte internationale Integration durch Handel und Investitionsoffenheit beruht auf der Annahme, dass die mit der Globalisierung verbundenen Gewinne die Verluste mehr als aufwiegen. Die Auslandsaktivitäten von multinationalen Unternehmen haben die Frage aufgeworfen, ob Ursprungsländer aufgrund der Verlagerung von Produktion und Beschäftigung ins Ausland letzten Endes Einbußen verzeichnen müssen. Das vorliegende Diskussionspapier untersucht die Beziehung zwischen inländischer Investitionstätigkeit und deutschen Direktinvestitionen von multinationalen Unternehmen im Ausland. Aus der bestehenden Forschungsliteratur lassen sich keine eindeutigen Schlussfolgerungen dahingehend ableiten, ob heimische Investitionen und Direktinvestitionen im Ausland als Substitute oder Komplemente angesehen werden können. Beitrag Unsere Studie liefert in dreifacher Hinsicht einen Beitrag zur vorhandenen Literatur. Erstens, verwenden wir einen einzigartigen Datensatz, der neben den jährlichen Bilanzinformationen auch die inländischen und ausländischen Investitionstätigkeiten von deutschen multinationalen Unternehmen umfasst. Zweitens basiert unser ökonometrischer Ansatz auf Propensity Score Matching Methoden und nutzt sowohl die Variation des extensiven als auch des intensiven Randes der ausländischen Tätigkeit. Wir zeigen, dass unser Schätzansatz sowohl für die Gleichzeitigkeit der ausländischen und inländischen Aktivitäten als auch für andere endogene Faktoren kontrolliert. Drittens, erlaubt die verwendete Schätzmethode einen Einblick in die potenziellen Kanäle, durch welche Auslandsaktivitäten inländische Investitionen beeinflussen: Technologie, Steuerersparnis und Gewinnverschiebungen sowie interne Kapitalmärkte. Ergebnisse Unsere Ergebnisse deuten darauf hin, dass die Gründung einer neuen ausländischen Tochtergesellschaft mit einer höheren heimischen Investitionstätigkeit verbunden ist. Der Effekt ist ökonomisch signifikant: Unsere Schätzungen implizieren eine Veränderung der Investitionstätigkeit im Inland von rund EUR 450,000. Der Basiseffekt der Auslandsaktivität auf die heimischen Investitionen ist hinsichtlich einer Vielzahl von Sensitivitätsanalysen robust. Für den intensiven Rand schätzen wir Elastizitäten, die-je nach Maß der ausländischen Investitionstätigkeit-im Bereich zwischen 0.13 und 0.23 liege...

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“…From 2002 until 2006, FDI had to be reported if the participation was 10% or more and the balance-sheet total exceeded 3 million Euros. Since 2007 the threshold of 10% applies only for direct shares, whereas for indirect shares or a mixture of direct and indirect shares the threshold has been raised to 50% (for details see Schild and Walter (2016) Whereas GDP and GDP per capita may increase the probability of holdings in the same country since they indicate the market size and purchasing power (and hence maybe profits which could be offset by interest payments) they may reduce the probability of holdings in an intermediary firms with large sales) it is assumed to be easier to receive external debt financing (see, e.g., Graham and Harvey (2001)). On the other hand, large firms may typically be more mature and hence might rather finance themselves with retained earnings (Ruf, 2011).…”

Section: Datamentioning

confidence: 99%

Tax Influence on Financial Structures of M&As

Harendt

2018

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Abstract: In this paper, I investigate the influence of tax incentives on the financial structures of mergers and acquisitions (M&A) conducted by multinational entities (MNE). Previous research has already found evidence for tax avoidance by debt shifting. I analyze the importance of locating debt at holdings which own the operating firm. Placing debt at the level of the holding is more advantageous since it allows inter alia for debt financing up to the purchase price. Accordingly, by using firm-level data provided by the German Central Bank I show empirically that the probability that a firm is held by a holding in the same country increases with the tax rate in that country (though the effect is rather small). As a limitation, I find this effect only for a sample of all firms and no additional effect in case of M&As (denoted as M&A firms). Since this way of debt financing requires that interest payments of holdings are used to offset profits of the operating firms, I consolidate financial structures of holdings and the operating firms. I discuss theoretically and show with descriptive statistics that this consolidation -the major contribution of my paper -leads to a higher total debt ratio compared to the unconsolidated case. However, this effect can only be observed in particular for the subsample of those M&A firms which actually belong to such structures of holdings and operating firms and does not lead to an increase of the debt ratio in the sample of all M&A firms. Finally, I show that the tax sensitivity of external debt financing increases with the consolidation (though again with no additional effect in case of M&A firms). I conclude that those findings may be one explanation why previous studies have found relatively low effects of taxes on debt financing.

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Linking Deutsche Bundesbank Company Data using Machine-Learning-Based Classification

Cited by 22 publications

References 7 publications

Service offshoring and firm employment

Service offshoring and firm employment

The effect of investing abroad on investment at home: On the role of technology, tax savings, and internal capital markets

Tax Influence on Financial Structures of M&As

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