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• The future of Russian outward foreign direct investment and the eclectic paradigm: What changes after the crisis of 2008–2009?

  31-54

  Kalman Kalotay

  Views:

  201

  This article explores the future of Russian outward foreign direct investment in the aftermath of the crisis of 2008–2009. As it is too early to analyse the full impact of the crisis, it develops hypotheses about the degree of slowdown in the foreign expansion of Russian transnational corporations. It uses an extension of the eclectic paradigm to home country advantages (competitive environment, business environment, development strategy, State involvement) applied to a comparison of the Russian Federation with other economies in transition as an analytical tool. Systematic differences between transnationals from the Russian Federation (global firms, based on natural resources, aiming for vertical integration of assets) and from new European Union member countries (regional firms, based on downstream activities or services, aiming for horizontal integration) allow us to formulate more solid conclusions about the future of the Russian firms facing lower export prices, lower market capitalizations and higher debts. In turn, this article argue that a comparison with the large emerging economies of Brazil, China and India, under the acronym of BRIC can be less useful in the current context, as these economies are significantly less affected by the crisis of 2008–2009 than the Russian Federation; hence they can not expect a slowdown in their outward foreign direct investment similar to that of Russian transnationals.

  JEL: F23; F21; O52; P29

• Financial Crisis, Economic Policy and Economics

  19-34

  Jozsef Moczar

  Views:

  144

  Concerning the financial crisis in 2007-2009 many politicians and economists, in addition
  to representatives of other disciplines have asked: why could it not have been avoided,
  why could it not have been forecast? The present paper provides a new answer to these
  questions. The main argument is that empirical economic policy reached a deadlock when
  economists acknowledged the equilibrium models based on efficient market theory. The
  static equilibrium paradigm which appeared in the middle of last century has strongly
  prevailed to the present day, leaving aside Kornai’s (1971) or Benassy’s (1982) or Goodwin’s
  (1991) warnings. Since the economy is never in equilibrium the simultaneous equations
  describing it may not provide any guide for politicians; what they should do and how they
  should do it in a time of economic crisis. The present author’s newest book (Móczár, 2008),
  besides the dynamic equilibrium, also sketches a new paradigm, i.e., non equilibrium
  modelling, instead of the orthodox equilibrium paradigm, which allows us to treat bubbles,
  to regulate money markets etc. Its necessity is outlined here.

  JEL classification: E00, E5, E6, G28 

• Corporate tax - a new paradigm is needed - I.: Income tax versus value-added tax

  26-47

  Laszlo Torok

  Views:

  468

  Since the existence of the corporate tax institution, it has been a difficult task to determine the exact corporate tax base. As long as states are as large as possible, taxpayers, on the other hand, are interested in the smallest possible tax base. National and supranational rules for determining the tax base are changing with unrealistic frequency. It is almost impossible to enforce them, so conflicts between countries and between companies and tax administrations over corporate tax payable seem to be perpetuating. With the rise of trans- and multinational corporations, aggressive corporate tax planning and covert tax avoidance have also emerged. National governments are trying to prevent this with bilateral and multilateral treaties. Still, the verdicts of the recently revealed multi-billion euro/dollar corporate tax cases prove that they do not have a deterrent effect, meaning that the measures taken so far are far from sufficient to prevent them. In my research hypothesis, I argue that the corporate tax system's current form is unsustainable at both national and global levels due to its intricate design and manipulability and its high macro- and micro-level implicit costs. I will then propose a new value-added tax and tax rate to compensate for the loss of government revenue due to the abolition of corporate tax in an equivalent and essentially clear way. After that, I tested the proposed new type of tax based on the European Union countries' value-added data. Finally, I present the new global tax's territorial principle to replace corporate tax and its contribution to national public burden-bearing.

  Journal of Economic Literature (JEL) codes: C53, E62, H24, K34