References of "Zou, Benteng 50003367"
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See detailForeign direct investment with endogenous technology choice
Dawid, Herbert; Zou, Benteng UL

in Pacific Economic Review (2017)

In this paper, we analyze optimal foreign direct investment of a firm operating in a duopolistic market. Foreign direct investment induces technological spillovers to a competitor in the foreign country ... [more ▼]

In this paper, we analyze optimal foreign direct investment of a firm operating in a duopolistic market. Foreign direct investment induces technological spillovers to a competitor in the foreign country to intensity of which depends on the absorptive capacity of the foreign firm and the size of the technological gap. We characterize a technology spillover threshold and show that for an intensity of spillovers below this threshold, there is a unique locally asymptotic stable steady state with a positive capital stock in the developing country. Furthermore, we characterize how optimal foreign investment patterns and the investor’s value function depend on the level of technology transferred and characterize the optimal level to be used for the foreign direct investment. [less ▲]

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See detailTo MigrateWith orWithout Ones’ Children in China - That is the Question
Chen, Yiwen UL; Fromentin, Vincent; Salagean, Ioana et al

E-print/Working paper (2017)

Where should Chinese internal migrant parents locate their school-aged children: migrate with them or leave them behind? And should they invest in private education of their children? Empirical evidence ... [more ▼]

Where should Chinese internal migrant parents locate their school-aged children: migrate with them or leave them behind? And should they invest in private education of their children? Empirical evidence based on the 2009 wave of the Rural-Urban Migration Survey in China (RUMiC) data is inconclusive. We use an overlapping generations model to find a theoretical optimum that maximizes parents’ utility which includes the children’s educational performance. Depending on the educational investment parents make and the relocation cost of children, we provide necessary and sufficient conditions for migrant parents to take their children to migrate and whether they should provide their children with private education. As the choices of migrant parents affect not only their children’s human capital accumulation, but also on the economic potential of their descendants, we present both short- and long-term consequences of the parents decision. [less ▲]

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See detailTo Migrate With orWithout the Children—A Theoretical Note
Chen, Yiwen UL; Zou, Benteng UL

in Economics Bulletin (2017), 37(2), 686-696

Tens of millions of young children were left behind by their migrant parents who left to find a job elsewhere to gain a better income and improve their families' living standards. Many studies suggest ... [more ▼]

Tens of millions of young children were left behind by their migrant parents who left to find a job elsewhere to gain a better income and improve their families' living standards. Many studies suggest that migrant parents should bring their children rather than leave them behind, especially EU internal migrants. In this short note, we give an economic reasoning for the choice of migrant parents. Our finding shows that emotionally, bringing the children makes both children and parents better off; however, economically, that may not be the case. The ambiguity depends on the forgone opportunity cost, relocation cost of children, children's motivation, and the quality of the public school at the origin and destination. [less ▲]

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See detailON THE DESIRABILITY OF TAX COORDINATION WHEN COUNTRIES COMPETE IN TAXES AND INFRASTRUCTURE
Han, Yutao; Pieretti, Patrice UL; Zou, Benteng UL

in Economic Inquiry (2017)

The paper contains two distinct messages. First, when jurisdictions compete in two independent strategic variables, the decision to coordinate on one variable (a tax rate) induces a carry-over effect on ... [more ▼]

The paper contains two distinct messages. First, when jurisdictions compete in two independent strategic variables, the decision to coordinate on one variable (a tax rate) induces a carry-over effect on the unconstrained instrument (infrastructure expenditures). Consequently, classical results of the tax coordination literature may be qualified. A second message is that the relative flexibility of the strategic instruments, which may depend on the time horizon of the decision-making, does matter. In particular, tax coordination is more likely to be detrimental (in terms of revenue and/or welfare) when countries can compete simultaneously in taxes and infrastructure, rather than sequentially. The reason is that simultaneity eliminates strategic effects between tax and non-tax instruments. [less ▲]

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See detailImmigration, occupational choice and public employment
Marchiori, Luca; Pieretti, Patrice UL; Zou, Benteng UL

in Annales d'Economie et de Statistique (2017)

This paper investigates the theoretical effects of immigration in an occupational choice model with three sectors: a low-skilled, a high-skilled and a public sector. The originality of our approach is to ... [more ▼]

This paper investigates the theoretical effects of immigration in an occupational choice model with three sectors: a low-skilled, a high-skilled and a public sector. The originality of our approach is to consider (i) inter-sectoral mobility of labor and (ii) public employment. The combination of these two features yields a new mechanism by which immigration can have positive effects. The model demonstrates that immigration increases wages in the high-skilled and the public sectors, provided that the immigrant workforce is not too large and the access to public jobs is not too easy. The average wage of natives may also increase accordingly. Moreover, immigration may improve workers’ welfare in each sector. Finally, the mechanism underlying these results does not require complementarity between natives and immigrants. [less ▲]

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See detailOptimal Income Taxation for the Alleviation of Working-Poverty When Domestic Work is Rewarded
Chen, Xi; Salagean, Ioana; Zou, Benteng UL

E-print/Working paper (2016)

The increase in income needed for working households to escape relative poverty may be achieved either by households supplying more hours of paid work on the labor market, or by policy makers adjusting ... [more ▼]

The increase in income needed for working households to escape relative poverty may be achieved either by households supplying more hours of paid work on the labor market, or by policy makers adjusting income taxation, minimum wages and social transfers targeted at working households. While past work has given considerable attention to the latter policy instruments, theoretical work on how income taxation could minimize working-poverty is scarce. Our study aims to fill this gap. Unlike the traditional optimal income taxation literature, which considers that households allocate time only between consumption and leisure, we explicitly model households’ decisions as including domestic work, which is a social contribution and should be rewarded. This new framework highlights (i) the importance of emphasizing the difference between domestic work and real leisure and, (ii) the policy implications of non-market time allocation. [less ▲]

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See detailThe Global Economic Crisis and the Effect of Immigration Workers on Native-born Employment in Europe
Fromentin, Vincent; Damette, Olivier; Zou, Benteng UL

in The World Economy (2016)

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See detailDifferential Games with (A) symmetric Players and Heterogeneous Strategies
Zou, Benteng UL

in Journal of Reviews on Global Economics (2016), 5

One family of heterogeneous strategies in differential games with (a)symmetric players is developed in which one player adopts an anticipating open-loop strategy and the other adopts a standard Markovian ... [more ▼]

One family of heterogeneous strategies in differential games with (a)symmetric players is developed in which one player adopts an anticipating open-loop strategy and the other adopts a standard Markovian strategy. Via conjecturing principle, the anticipating open-loop strategic player plans her strategy based on the possible updating the rival player may take. These asymmetric strategies should be appropriate choices in some modelling circumstances and they frame one of the infinitely many non-degenerate Markovian Nash Equilibrium. Except the stationary path, this kind of strategy makes the study of short-run trajectory possible, which usually are not subgame perfect. However, the short-run non-perfection may provide very important policy suggestions. [less ▲]

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See detailThreshold preferences and the environment
Schumacher, Ingmar; Zou, Benteng UL

in Journal of Mathematical Economics (2015), 60

In this article we study the implication of thresholds in preferences. To model this we extend the basic model of John and Pecchenino (1994) by allowing the current level of environmental quality to have ... [more ▼]

In this article we study the implication of thresholds in preferences. To model this we extend the basic model of John and Pecchenino (1994) by allowing the current level of environmental quality to have a discrete impact on how an agent trades off future consumption and environmental quality. Thus, we endogenize the semi-elasticity of utility based on a step function. We find that for low (high) thresholds, environmental quality converges to a low (high) steady state. For intermediate levels it converges to a stable p-cycle, with environmental quality being asymptotically bounded below and above by the low and high steady state. As policy implications we study shifts in the threshold. Costless shifts of the threshold are always worthwhile. If it is costly to change the threshold, then it is worthwhile to change the threshold if the threshold originally was sufficiently low. Lump-sum taxes lead to a development trap and a proportional income tax should be preferred. [less ▲]

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See detailDoes tax competition increase disparity among jurisdictions?
Han, Yutao; Pieretti, Patrice UL; Zou, Benteng UL

E-print/Working paper (2015)

This paper investigates whether a less-developed economy can catch up with a more developed one when they compete for foreign direct investments. The main message of the paper is that jurisdictional ... [more ▼]

This paper investigates whether a less-developed economy can catch up with a more developed one when they compete for foreign direct investments. The main message of the paper is that jurisdictional competition can enable the lagging country to catch up if capital mobility is sufficiently high and the productivity gap is not too large. Further, we show that size asymmetry reinforces (weakens) the productivity catch-up resulting from interjurisdictional competition when the lagging economy is small (large). Finally, we demonstrate that the development gap widens when capital becomes less mobile, which is at odds with previous findings. [less ▲]

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See detailStochastic stability of endogenous growth: Theory and applications
Boucekkine, Raouf; Pintus, Patrick; Zou, Benteng UL

E-print/Working paper (2015)

We examine the issue of stability of stochastic endogenous growth. First, stochastic stability concepts are introduced and applied to stochastic linear homogenous differen- tial equations to which several ... [more ▼]

We examine the issue of stability of stochastic endogenous growth. First, stochastic stability concepts are introduced and applied to stochastic linear homogenous differen- tial equations to which several stochastic endogenous growth models reduce. Second, we apply the mathematical theory to two models, starting with the stochastic AK model. It’s shown that in this case exponential balanced paths, which characterize optimal trajectories in the absence of uncertainty, are not robust to uncertainty: the economy may almost surely collapse at exponential speed even though productivity is initially arbitrarily high. Finally, we revisit the seminal global diversification endogenous growth model (Obstfeld, 1994): taking into account stochastic stability calls for a redefinition of the mean growth concept, which leads to revisit the established wisdom on the growth effect of global diversification. [less ▲]

Detailed reference viewed: 98 (8 UL)
See detailInstitutional dynamics under revenue volatility and revenue-dependent lobbying power: A stochastic differential game approach
Boucekkine, Raouf; Prieur, Fabien; Zou, Benteng UL

E-print/Working paper (2015)

We propose an analysis of institutional dynamics under uncertainty by the means of a stochastic differential lobbying game with two main ingredients. The rst one is uncertainty inherent in the ... [more ▼]

We propose an analysis of institutional dynamics under uncertainty by the means of a stochastic differential lobbying game with two main ingredients. The rst one is uncertainty inherent in the institutional process itself. The second one has to do with the crucial role of resource windfalls in economic and political outcomes, shaping lobbying power and adding a second source of uncertainty. First, we focus on uncertainty surrounding the institutional process only and show that its main consequence is the existence of multiple equilibria with very distinct features: symmetric equilibria which lead the economy to reach almost surely a stable pointwise institutional steady state in the long run even in the absence of the retaliation motive put forward by the deterministic lobbying literature, and asymmetric equilibria which only show up under uncertainty and do no allow for stochastic convergence to a steady state. Second, when accounting for the two sources of uncertainty together with resource revenue-dependent lobbying power, we show that revenue volatility tends to stabilize institutional dynamics compared to the deterministic counterpart. [less ▲]

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See detailDifferential Games with (A)symmetric Players and Heterogeneous Strategies
Zou, Benteng UL

E-print/Working paper (2014)

One family of heterogeneous strategies in differential games with (a)symmetric players is developed in which one player adopts an anticipating open-loop strategy and the other adopts a standard Markovian ... [more ▼]

One family of heterogeneous strategies in differential games with (a)symmetric players is developed in which one player adopts an anticipating open-loop strategy and the other adopts a standard Markovian strategy. Via conjecturing principle, the anticipating open-loop strategic player plans his strategy based on the possible updating the rival player may take. These asymmetric strategies frame nondegenerate Markovian Nash Equilibrium, which can be subgame perfect. Except the stationary path, this kind of strategy makes the study of short-run trajectory possible, which usually are not subgame perfect. However, the short-run nonperfection provides very important policy suggestions. [less ▲]

Detailed reference viewed: 107 (8 UL)
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See detailImmigration, occupational choice and public employment
Marchiori, Luca; Pieretti, Patrice UL; Zou, Benteng UL

E-print/Working paper (2014)

This paper investigates the theoretical effects of immigration in an occupational choice model with three sectors: a low-skilled, a high-skilled and a public sector. The originality of our approach is to ... [more ▼]

This paper investigates the theoretical effects of immigration in an occupational choice model with three sectors: a low-skilled, a high-skilled and a public sector. The originality of our approach is to consider (i) intersectoral mobility of labor and (ii) public employment. We highlight the fact that including a public sector is crucial, since omitting it implies that low-skilled immigration unambiguously reduces wages and welfare of all workers. However, when public employment is considered, we demonstrate that immigration increases wages in the high-skilled and the public sectors, provided that the immigrant workforce is not too large and the access to public jobs is not too easy. The average wage of natives may also increase accordingly. Moreover, immigration may improve workers’ welfare in each sector. Finally, the mechanism underlying these results does not require complementarity between natives and immigrants. [less ▲]

Detailed reference viewed: 111 (6 UL)
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See detailForeign direct investment with endogenous technology choice
Dawid, Herbert; Zou, Benteng UL

E-print/Working paper (2014)

In this paper, we analyze optimal foreign direct investment of a firm which operates in a duopolistic market. We characterize a technology spillover threshold and show that for an intensity of spillovers ... [more ▼]

In this paper, we analyze optimal foreign direct investment of a firm which operates in a duopolistic market. We characterize a technology spillover threshold and show that for an intensity of spillovers below this threshold, there is a unique locally asymptotic stable steady state with a positive capital stock in the developing country. Furthermore, we characterize how optimal foreign investment patterns and the investor’s value function depend on the level of technology transferred and characterize the optimal level to be used for the foreign direct investment. [less ▲]

Detailed reference viewed: 85 (4 UL)
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See detailDoes size asymmetry exacerbate the inefficiency of tax competition?
Han, Yutao UL; Pieretti, Patrice UL; Zou, Benteng UL

in Economics Letters (2014), 122

Many authors demonstrate that the tax gap resulting from tax competition increases with the size asymmetry of the competing countries. Consequently, increasing country-size disparities exacerbates the ... [more ▼]

Many authors demonstrate that the tax gap resulting from tax competition increases with the size asymmetry of the competing countries. Consequently, increasing country-size disparities exacerbates the inefficiency of tax competition. The aim of this note is to show that this classical view has no general validity, if we consider that countries compete not only in taxes, but also in the provision of infrastructure. The simple model we develop for this purpose demonstrates that the effect of size disparity on efficiency depends crucially on the degree of international capital mobility. [less ▲]

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See detailThe global economic crisis and the effect of immigration on the employment of native-born workers in Europe
Fromentin, vincent; Damette, Olivier; Zou, Benteng UL

E-print/Working paper (2014)

The debate regarding the economic effects of immigration has attracted renewed interest in European countries since the economic crisis. We provide an approximation for the labor market effects of ... [more ▼]

The debate regarding the economic effects of immigration has attracted renewed interest in European countries since the economic crisis. We provide an approximation for the labor market effects of immigrants in four European countries during the global economic crisis after briefly analyzing the situation of native- and foreign-born workers for the recent period. Our analysis focuses on the correlation between the stock of immigrant workers and the number of local labor market workers across several segments of the labor market using a simple model approach. Based on data from Eurostat and the LFS (Labour Force Survey), we estimate a structural dynamic model using the Generalized Method of Moments (GMM) to take into account the adjustment dynamics in the labor market and labor market segment, educational level, country of origin and gender of the workers. Overall, the empirical results suggest that the immigration shock on the employment rates of native-born workers is persistent and very weak over the business cycle. The effect is globally positive and the origin of immigrants does not appear to change the nature of the impact. We offer some explanations for these findings that are linked with the dual labor markets and the differences in the degree of substitution between native and immigrant workers. [less ▲]

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See detailAsymmetric Competition among Nation States: A Differential Game Approach
Han, Yutao; Pieretti, Patrice UL; Zanaj, Skerdilajda UL et al

in Journal of Public Economics (2014)

This paper analyzes the impact of foreign investments on a small country’s economy in the context of international competition. To that end, we model tax and public input competition within a differential ... [more ▼]

This paper analyzes the impact of foreign investments on a small country’s economy in the context of international competition. To that end, we model tax and public input competition within a differential game framework between two unequally sized countries. The model accounts for the widely recognized characteristic that small states are more flexible in their political decision-making than larger countries. However, we also acknowledge that small size is associated with limited institutional capacity in the provision of public services. The model shows that the long-term outcome of international competition crucially depends on the degree of capital mobility. In particular, we show that flexibility mitigates against - but does not eliminate - the likelihood of collapse in a small economy. Finally, we note that the beneficial effect of flexibility in a small state increases with its inefficiency in providing public services and with the degree of international openness. [less ▲]

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See detailCarbon capture and storage and transboundary pollution: A differential game approach
Bertinelli, Luisito UL; Camacho, Carmen; Zou, Benteng UL

in European Journal of Operational Research (2014)

We study the strategic behavior of two countries facing transboundary CO2 pollution under a differential game setting. In our model, the reduction of CO2 concentration occurs through the carbon capture ... [more ▼]

We study the strategic behavior of two countries facing transboundary CO2 pollution under a differential game setting. In our model, the reduction of CO2 concentration occurs through the carbon capture and storage process, rather than through the adoption of cleaner technologies. Furthermore, we first provide the explicit short-run dynamics for this dynamic game with symmetric open-loop and a special Markovian Nash strategy. Then, we compare these strategies at the games’ steady states and along some balanced growth paths. Our results show that if the initial level of CO2 is relatively high, state dependent emissions reductions can lead to higher overall environmental quality, hence, feedback strategy leads to less social waste. [less ▲]

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See detailStochastic stability of endogenous growth: The AK case
Boucekkine, Raouf; Zou, Benteng UL

E-print/Working paper (2014)

This note studies the stochastic stability of the standard AK growth model un- der uncertain output technology. Capital accumulation follows a stochastic lin- ear homogenous differential equation. It’s ... [more ▼]

This note studies the stochastic stability of the standard AK growth model un- der uncertain output technology. Capital accumulation follows a stochastic lin- ear homogenous differential equation. It’s shown that exponential balanced paths, which characterize optimal trajectories in the absence of uncertainty, are not robust to uncertainty. Precisely, it’s demonstrated that the economy almost surely col- lapses at exponential speed even though productivity is initially arbitrarily high. [less ▲]

Detailed reference viewed: 50 (5 UL)