Clark University | Economic Geography Journal

Remapping the Fiscal State After the Global Financial Crisis, by Andrew van Hulten

Abstract: The global financial crisis (GFC) refocuses attention on the capacity of states to regulate global finance. In this article, I argue that states are augmenting their regulatory capacity by promoting the interpenetration of national economic surveillance systems. I develop this argument by exploring the recent efforts of powerful states to address a particular form of offshore regulatory escape: tax evasion. Previous analyses of offshore processes have been framed by strong assumptions about the geographic domains of states and markets. I present a new analytic framework that weakens these geographic assumptions and explains why some states are more able than others to address offshore tax evasion through unilateral, bilateral, and multilateral channels. The framework is applied to explain the mechanisms through which powerful states have reclaimed evaded taxes and forced global transparency standards on tax havens after the GFC. I conclude that the regulatory changes brought about by recent attacks on tax havens constitute an important remapping of the fiscal state. These attacks provide an interesting case study of the ways in which states are augmenting their capacity to regulate a range of cross-border financial flows.

Key words: fiscal sovereignty; global financial regulation; tax havens; state power

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Agglomeration, Related Variety, and Vertical Integration, by Giulio Cainelli and Donato Iacobucci

Abstract: Several recent studies have investigated the relationship between the geographic concentration of production and vertical integration, based on the hypothesis that the spatial agglomeration of firms in the same industry facilitates input procurement, thereby reducing the degree of vertical integration. This article contributes to this debate in two ways: first, we focus on interindustry vertical integration, and second, we consider the effects on vertical integration of unrelated and vertically related variety at the local level. The latter was measured using information from input-output tables and captured the opportunities for outsourcing within the local system. A data set of 24,663 Italian business groups in 2001 was used to estimate Tobit models to investigate the influence of vertically related variety and other agglomeration forces on the degree of vertical integration of groups. We found that vertical integration is influenced by industry specialization at the local level and that higher vertically related variety reduces the need for firms to integrate activities, since they have more opportunities to acquire intermediate goods and services within the local system. We analyze the manufacturing and different macroareas and show that this relationship is also influenced by technology and differences in the organization of economic activities at the local level.

Key words: vertical integration; agglomeration; related variety; business groups

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The Internationalization of Corporate R&D and the Automotive Industry R&D of East-Central Europe, by Petr Pavlínek

Abstract: This article examines the development of corporate research and development (R&D) in the automotive industry of East-Central Europe (ECE) in the context of the internationalization of corporate R&D generally and the automotive industry R&D specifically. Driven by large inflows of foreign direct investment since the early 1990s, vehicle assembly and the production of automotive components grew significantly in ECE. In my study I investigated the extent to which these increases in production have also led to the development of automotive R&D as an example of a higher value-added function of the automotive value chain. I conducted a more detailed analysis of Czech automotive R&D because of its prominent position in ECE. Despite modest growth, my analysis uncovered inherent weaknesses of automotive R&D in ECE and strong barriers to its future development related to its peripheral position in the European and global automotive production networks.

Key words:research and development; internationalization; automotive industry; East-Central Europe; Czechia

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The Evolution of Trade and Scientific Collaboration Networks in the Global Wine Sector: A Longitudinal Study Using Network Analysis, by Lorenzo Cassi, Andrea Morrison, Anne L.J. Ter Wal

Abstract:Throughout the past three decades, the global pattern of wine production has undergone fundamental changes, most notably the emergence of New World producers. This article presents a detailed account of the sector's changing global organization from 1974 to 2004 by applying network analysis methods to the evolution of international trade and scientific collaboration networks. We argue that there is a strong mutual interdependence of trade and scientific knowledge production, as a result of which we expect the geographic configuration of global knowledge and trade networks to coevolve. Our results show that, over time, only a few New World wine producers developed trade and scientific collaboration networks that resemble those of traditional Old World producers. They also show that structures of trade and scientific collaboration networks are more alike for Old World than for New World producers, which suggests that, contrary to our expectations, it is particularly Old World producers who may have mainly benefited from participation in international scientific collaboration.

Key words: international trade; scientific collaboration network; longitudinal network analysis; wine sector; globalization

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