Cross-border Economic Activities Research Articles

Analysis of the effectiveness of implementing international financial reporting standards in small business

Introduction. The implementation of International Financial Reporting Standards (IFRS) in small businesses is attracting significant attention as a means of enhancing financial transparency and improving comparability in global markets. This paper examines the effectiveness of implementing IFRS in small enterprises, specifically the potential benefits and challenges they face in this regard. The importance of unified financial reporting standards in strengthening investor confidence and facilitating cross-border economic activities, which are gaining increasing importance in this process, is emphasized. The purpose of the paper is to analyze whether the transition of small businesses to IFRS leads to improved quality of financial reporting, increased access to capital, and growth in operational efficiency, while considering the associated costs and challenges. Results. The results indicate that while the implementation of IFRS requires significant initial costs, including training and system upgrades, the long-term benefits generally outweigh these costs. Small businesses that have adopted IFRS produce more accurate and reliable financial reports, which in turn attract potential investors and improve creditworthiness. Standardized reporting practices reduce the risk of financial discrepancies and errors, contributing to increased accountability and transparency. Conclusions. The findings of the study indicate that the effective implementation of IFRS in small enterprises depends on appropriate support and resources, including access to IFRS training and consulting services. Despite existing obstacles, the overall impact on the quality of financial reporting and business growth is positive. The study highlights the need for ongoing support from regulatory bodies to facilitate the transition to IFRS and alleviate the burden on small enterprises. Prospects for further research involve studying the sectoral impact of IFRS implementation on small businesses, as different sectors may experience varying levels of benefits and challenges from IFRS adoption. Long-term studies will provide more information on the enduring impact of the transition to IFRS on the sustainability and growth of small businesses.

Coupling and decoupling of ancestral linkages and current cross-border economic activities: Genetics and policy

This paper studies the potential link between the biological evolution of populations and present-day economic interactions by estimating the correlation of shared ancestry among populations with cross-border capital and human flows. To this end, we employ the new concept of genetic distance, based on (dis)similarity of neutral gene alleles, to quantify shared ancestry. We then incorporate the genetic distance measure into an augmented gravity model, traditionally used to analyze the effect of geographical distance on bilateral exchange. Our analysis focuses on bilateral foreign direct investment (FDI) and migration across 135 countries and we use both linear regression techniques as well as the Poisson Pseudo-Maximum Likelihood Estimator to account for any non-linearities in the model. Our results show that a 1% increase in genetic distance reduces FDI flows by 0.08% while controlling for other distance constructs and factors associated with global capital and human movement. Genetic distance also has a negative effect on migration, where a 1% increase in genetic distance reduces migration flows by 0.22%, with all other things remaining constant. Our study, therefore, links shared ancestry with economic behavior, showing how historical connections are associated with current economic exchanges among nations. Additionally, recognizing that ancestral ties are outside human control, we examine policy measures that help nations overcome such distance barriers. Our findings show that strengthening a nation’s institutional quality and adherence to the rule of law can effectively mitigate any negative correlation of distance constructs with economic exchanges. These insights suggest that prudent policies to foster a stable business environment are essential for any nation to attract FDI and human capital, even from geographically or genetically distant nations.

Digital Trade in the EU–New Zealand Free Trade Agreement: An Appraisal

The increasing reliance on digital technologies for cross-border economic activity has sparked the quest for adequate rules. Preferential trade agreements have become the primary platform for digital trade rulemaking and the recently signed Free Trade Agreement (FTA) between the European Union (EU) and New Zealand is one of the latest additions to these far-reaching regulatory efforts. The EU– NZ FTA is a particularly instructive case study, as it brings together two important legal entrepreneurs in the area of digital trade law that, however, have different positions in the regulatory landscape and different domestic priorities. The article seeks to reveal the points of convergence and divergence between the two parties and also shows how these could be reconciled with the concluded EU–NZ deal. In the latter context, the article evaluates the normative value and the potential impact of the agreement as well as situates it in the broader and geopolitically complex landscape of digital trade rulemaking. digital trade, data flows, data protection, electronic commerce, free trade agreements, European Union, New Zealand

Impact of Ease of Doing Business on Foreign Direct Investment in Nigeria

The principal purpose of this study was to unravel the effect of ease of doing business on foreign direct investment in Nigerian from 1980 to 2020. To achieve these goals, detailed analysis of ease of doing business on foreign direct investment was carried out. The ARDL and Bounds Testing Approach were used to investigate the long run and short-run relationship between the variables. The result shows that ease of doing business in terms of access to electricity is a significant predictor of foreign direct investment up to the second period lag in the short run and in the long run as well. This implies that more investment is needed in power sector to further enhance energy generation and distribution in the country All other variables, however, seem not to be statistically significant in the long run. Furthermore, we found out that the variables are statistically significant in the short run with the exception of the initial and first period lag of gross domestic product, and the second period lag of access to electricity. The study recommended among others that there should be optimal control of trade through the borders of the economy. In this way, all cross-border economic activities are accounted for. Governments should be intentional about achieving better ease of doing business score and make targeted and reformed policies to this end. One of these ways is by reducing and simplifying procedures involved in registration, setting up a business, tax, licenses, and other matters that borders around businesses.

Foreign Ties That Bind: Cross-Border Firm Expansions and Fund Portfolio Allocation Around the World

AbstractWe investigate whether international operations enhance information links between firms and foreign investors. Exploiting novel subsidiary-level data and within-location variations, we show that, after expanding into another country, a firm attracts greater investment allocation from funds from that country than from other foreign funds. This increase is economically significant, equivalent to one-fifth of the average firm weight in a country-specific portfolio. The observed effect cannot be attributed to funds’ influence, persists even when funds are already familiar with the firm, and helps them generate superior risk-adjusted returns. Our results suggest that firms’ cross-border economic activities contribute to global financial interconnectedness.

The Economic Impact of Closing the Boundaries: The Lower Minho Valley Cross-Border Region in Times of Covid-19

ABSTRACT The COVID-19 crisis experienced since early 2020 has been the first time in decades that all the boundaries between European Union member-states have been systematically re-set. This paper examines the economic impact derived from re-establishing the boundary on a particular cross-border region located between Galicia (Spain) and Portugal. The paper begins by outlining the theoretical considerations on the interplay between borders and economy. After examining the case-study area and the decisions taken by the Spanish and Portuguese authorities in an attempt to control the spread of the virus in 2020, the article explains the methods used to obtain the results. Two sets of results are presented. Firstly, the direct consequences for cross-border economic activities are considered. Secondly, the fall in Gross Domestic Product is quantified for sectors and municipalities in the cross-border region, distinguishing between, on the one hand, the overall effect caused by the restrictions due to the lockdown situation and, on the other, the precise impact attributed to the re-establishment of the international boundary. This is a worthy addition to previous literature given that this paper details the specific economic effects caused by the COVID-19 crisis in a cross-border region directly affected by the boundary closure.

Polio: The Disease that Reemerged after Six Years in Ethiopia.

Polio is a disabling and potentially deadly disease caused by a wild poliovirus and vaccine-derived poliovirus. The purpose of this review is to discuss the current situation of polio in Ethiopia. Relevant scientific articles on Polio were searched from different data bases and websites. The first wild poliovirus in Ethiopia was detected in 1999, followed by detection of few cases in 2000 and 2001. No wild poliovirus was detected in Ethiopia for the next 3 years (2001-2003). However, the disease resurged again in the country between 2004 and 2008 due to challenge to provide sufficient oral poliovirus vaccine coverage, migration and cross border economic activities and lack of good acute flaccid paralysis surveillance. After almost 5 years with no wild polio virus, Ethiopia again affected by polio outbreak importation in 2013. However, due to multiple supplementary immunization activities campaigns of improved quality and enhanced surveillance, the outbreak was eventually successfully interrupted within 6 months of confirmation. The most recent emergence of polio in Ethiopia has seen in this year (2020) six years after the country documented zero polio cases since 2014. The cause of the resurgence of the disease is circulating vaccine derived polio virus-2. Currently, Ethiopia has been conducting outbreak response by declaring Mop-up campaigns since September 2020. Therefore, it can be recommended that: - 1. The country has to completely shift from oral polio virus vaccine to inactivated polio vaccine so that the risk of vaccine derived polio will be diminished; 2. Ethiopia has to strengthen the mop up campaign that it has started in September 2020 following the reemergence of the disease in the country; 3. Ethiopia has to strengthen surveillance for acute flaccid paralysis in order to rapidly detect any new virus importation and to facilitate a rapid response.

Russian Border Controls in Times of the COVID-19 Pandemic: Social, Political, and Economic Implications

ABSTRACT The article considers the role of Russian border controls in the context of the COVID-19 pandemic, including its impacts on immigration and customs controls and on cross-border social and economic activities. Although in March 2020 Russian border controls proved to be insufficient, they still were used as one of the main tools for immobilizing people. The sanitary bordered order contributed to social exclusion of marginalized groups. Meanwhile, those who had money, access to decision-making, eligible immigration status, ability to make their voices heard, or access to advanced knowledge on travel logistics still had some options to move across the “closed border.”

Trade and competition (laws): Interrelations from a Southern African perspective

As a result of the processes of globalisation and of technological revolution, markets now transcend countries’ physical borders. Increasingly interconnected, borderless and digitalised global markets, thus, tend to develop mass markets, increase the integration of enterprises and so produce goods and provide services that are readily accessible for consumers. Easy access improves knowledge transfer and raises economic efficiencies and expectations. However, there are also downsides. The ever-diminishing distinction between goods and services in these markets poses a threat to the diversity of goods and services and, consequently, to small market players at both country and company level. Thus, the rise of anti-competitive cross-border economic activities such as collusion, international mergers and filling dominant positions gives reason to pause and revisit the relationship between competition and trade from the perspective of African countries, where national markets are generally small and where small and medium-sized enterprises (SMEs) represent the majority of market players. While economic analysis of trade on its own often assumes static models, attention to competition and especially to the interface between trade and competition and between its laws and policies reveals possibilities of enhancing the focus on the diversification and development of productive capabilities that are crucial for the economic development of the small-scale national market players, and inclusive growth, within most African states. In this chapter we present such a perspective to economic policymaking in part by distinguishing between trade and competition at the level of economic activity (section 2) and trade and competition laws (section 3) when discussing their interrelations. We illustrate the latter by evaluating whether and to what extent the behaviour of cross-border economic operators is currently disciplined, with a specific focus on South Africa, one of Africa’s largest economies. South Africa has a well-articulated policy architecture for trade and competition; is a party to both major southern African regional agreements, the Southern African Customs Union (SACU) and the Southern African Development Community (SADC); and is involved in recent initiatives directed at African integration. We then conclude the chapter (section 4).

The new borders as local economic possibility? The case of post-1920 Hungary

ABSTRACT Hungary lost large parts of its historical territory as a consequence of the 1920 Trianon Peace Treaty. Although the new borders in general followed ethnic boundaries, neighbouring states had clear strategic and economic interests even in areas where Hungarians constituted the majority among local people. Taking these interests into consideration, the peace treaty deprived Hungary of most of its economic resources. The new borders also meant new customs frontiers. Railway lines were cut, and most economic connections were broken. Passport obligations and customs formalities were introduced overnight in the middle of the old kingdom, separating families and cutting estates in two. Once prosperous regional centres now became peripheries in their own country. However, local communities were able to take advantage of the new possibilities – both legal and illegal – arising from the borderland situation. This paper provides examples of such cross-border economic activities in the 1920s. For instance, dual landowners could cultivate their land on both sides of the border, and thus had the possibility to cross the border legally anywhere within the territory of their estates during daylight. Others traversed the border without a passport or the necessary documentation, mostly to engage in contraband activities. Smuggling was also common among dual landowners. The paper focuses mostly on these illegal acts. Since contraband was not confined to cross-border transportation (illicit domestic transport was also deemed smuggling), the author gives an overview of legal regulations on contraband and shows how these rules were enforced. He examines what kind of goods were smuggled, what the motives of the contrabandists were (both in time and space), and compares the contraband activities of the lower and upper classes. The presented case studies show that illegal border crossings and even contraband offences were treated rather differently by local authorities.

Merchant hubs and spatial disparities in the private enforcement of international trade regimes

Private enforcement through courts has been put forward as a possible substitute to public enforcement of federal and international trade regimes. In this article, we seek to advance the empirical literature on private enforcement in the EU context by overcoming the limitations of existing datasets. We present a new dataset measuring referral activity at subnational level and argue that EU trademark registrations represent a better proxy for cross-border economic activity than intra-EU trade in goods. EU trademark registrations capture trade in services as well as goods and are measured at the regional rather than at the national level. Consistent with theories emphasising the link between economic and legal integration, we find that regions with higher concentrations of EU trademark users generate significantly more referrals. Our analysis suggests that private enforcement is more effective in regions with large trade hubs and less so in more peripheral regions with less trade-oriented economies.

Flujos comerciales agroalimentarios en una región transfronteriza dominico/haitiana: Elías Piña/Departamento Central

One key factor in the studies carried out on cross-border regions, are the value chains that are established through economic trade. This article examines this issue with respect to the Dominican Republic/Haitian border (Elias Pina-Departamento Central), through an analysis of agri-food chains. For this purpose, a study was made of six agricultural products that cross the border in both directions. This work included observations, the gathering of statistical data, and interviews with key stakeholders in these processes. The value chains highlight typical features of unequal cross-border trade. Moreover, they also show how the region, and specifically local producers, have limited access to the profits generated by such cross-border economic activity.

Malaysia-Thailand Cross Border Trade and Cross Border Special Economic Zone Potential: A Case Study of Rantau Panjang ­Sungai Kolok Cross Border Town

Towns along the Malaysia-Thailand border have always been associated with backwardness and being low-income regions. This is mainly because policy development in these border regions is based more on defence and security rather than economic considerations. Economic structures and cross-border trade towns of Sg. Kolok (Narathiwat, Southern Thailand) and Rantau Panjang (Kelantan, Malaysia) were examined with the objective to measure cross-border economic activity and the feasibility of establishing a Cross Border Special Economic Zone. Both towns are a shopping haven among local and foreign tourists, and have the potential to become a leading cross-border tourism product of the Malaysia-Thailand border. The Malaysian government has also implemented the Eastern Corridor Economic Region to develop the East Coast region including Kelantan. Meanwhile, the Thailand Government has carried out the Southern Border Provinces Special Zone to develop its Southern region, including Narathiwat. With the security assurance in Southern Thailand coupled with both development plans being implemented, this may intensify economic activities in the towns of Rantau Panjang and Sg. Kolok. It was revealed that this has a spill-over effect in the border areas and the potential of creating a Cross Border Special Economic Zone at these border towns.

A Note on Resolution of Tax Disputes Arising from DTTs and Implications for Developing Countries

Countries sign bilateral double tax treaties (DTTs) to avoid or mitigate double taxation in cross border economic activity. It is hardly possible to ignore the effect of double taxation in the era of globalization. DTTs are signed between two countries to allocate tax jurisdiction between them and to avoid tax disputes between the taxpayer and the country concerned. Nonetheless, tax disputes crop up since such treaties may be open to interpretation at the time of implementation. Hence, DTTs contain tax dispute resolution mechanism. The widely recognized dispute resolution mechanisms are the mutual agreement procedure (MAP) –a kind of negotiation between the two contracting states– and compulsory arbitration. However, the aptness and efficacy of these tax dispute resolution mechanisms have been seriously questioned particularly from the vantage point of developing countries such as Ethiopia. Although Ethiopia has signed several DTTs with a view to attracting FDI, no study has been made which sheds some light on the essence and operation of the MAP in the DTTs. This note aims at exploring the tax dispute resolution mechanisms incorporated in DTTs since such mechanisms have implication for developing countries including Ethiopia.
 Key terms
 Globalization, International taxation, Double taxation, Mutual agreement procedure, Compulsory arbitration

Invisibilidades e Violências nos conflitos socioambientais em terras indígenas da microrregião do Alto Solimões, Amazonas Brasil

Marcadas pela sociodiversidade das formas de apropriação dos bens naturais, as sociedades rurais amazônicas compreendem uma dinâmica territorial, econômica e política singular na Pan-Amazônia. Nesta região, tais usos se intensificam por interesses de Estado e mercados, permitindo-nos evidenciar inúmeros conflitos socioambientais decorrentes das relações de acesso as terras, águas e florestas. Este estudo apresenta os conflitos socioambientais envolvendo terras tradicionalmente ocupadas por indígenas, ribeirinhos e comunidades agroextrativistas no Estado do Amazonas. A abordagem metodológica utilizada foi baseada na pesquisa qualitativa e quantitativa com a utilização de entrevistas semiestruturadas e análise documental. No Estado do Amazonas, na microrregião do Alto Solimões, onde se localiza a tríplice fronteira amazônica Brasil, Colômbia e Peru, os conflitos pela apropriação dos bens naturais são marcados historicamente pelo narcotráfico, pela intensificação da ação ilegal de madeireiros, garimpeiros, e pescadores comerciais em territórios de uso comum. Estes conflitos têm impossibilitado a garantia dos direitos territoriais e da gestão dos recursos naturais de que dispõem as sociedades rurais, marcadas pela violência política dos atos de Estado e pelos ilegalismos das atividades econômicas transfronteiriças. Por outro lado, ao enfrentarem as incertezas de uma ausência-presente do Estado, as sociedades rurais locais vêm acionando diversos mecanismos de resistência, dentre eles identitários e territoriais, que se configuram contra o avanço da violência, conivência e desrespeito ao uso tradicional de suas terras historicamente ocupadas.

Merchant Hubs and Spatial Disparities in the Private Enforcement of International Trade Regimes

Private enforcement through courts has been put forward as a possible substitute to public enforcement of federal and international trade regimes. In this article, we seek to advance the empirical literature on private enforcement in the EU context by overcoming the limitations of existing datasets. We present a new dataset measuring referral activity at subnational level and argue that EU trademark registrations represent a better proxy for cross-border economic activity than intra-EU trade in goods. EU trademark registrations capture trade in services as well as goods and are measured at the regional rather than at the national level. Consistent with theories emphasising the link between economic and legal integration, we find that regions with higher concentrations of EU trademark users generate significantly more referrals. Our analysis suggests that private enforcement is more effective in regions with large trade hubs and less so in more peripheral regions with less trade-oriented economies.

External & Intraregional Interactions of the Russian Far East: Comparative Assessment

This paper argues that East Asia is becoming an increasingly important trade partner for Russia due to the need of the latter to diversity its external economic relations. The Russian Far East (RFE) shares a long border with the countries of North-East Asia, and its economic development is largely determined by the scale of cross-border economic activity. We use regional and international data to evaluate the trade relations of RFE with domestic and foreign markets over a ten-year period. The results indicate that RFE regions trade more intensively with the domestic economy than with adjacent countries. Over the entire sample period, RFE regions faced lower border hurdles in their trade with the rest of Russia than with the three Northeast Asian countries. In other words, trade between RFE and Russia was subject to a tariff equivalent of 44% relative to the trade within RFE. By contrast, the cost of trade with Northeast Asia was 57% higher than intraregional RFE trade. These tariff equivalents were not constant over time. In the years 2004–2010, border effects were higher with NEA again recording barriers that raised costs by 67%. In the period after 2010, barriers have decreased. In the case of NEA, the decline was 20 percentage points, while for Russia it was half that amount. We found that for RFE barriers have been on the decline but apparently the border costs in trade with NEA have been falling more drastically than with Russia.

Foreign Ties that Bind: Cross-Border Firm Expansions and Fund Portfolio Allocation Around the World

We investigate whether international operations enhance information links between firms and foreign investors. Exploiting novel subsidiary-level data and within-location variations, we show that, after expanding into another country, a firm attracts greater investment allocation from funds from that country than from other foreign funds. This increase is economically significant, equivalent to one-fifth of the average firm weight in a country-specific portfolio. The observed effect cannot be attributed to funds' influence, persists even when funds are already familiar with the firm, and helps them generate superior risk-adjusted returns. Our results suggest that firms' cross-border economic activities contribute to global financial interconnectedness. Internet appendix available at: https://ssrn.com/abstract=3209972

The double-edge resource-based view of logistics performance and governance in Asian countries

PurposeAsia has been transformed into a well-regulated dynamic platform for trade and is today world’s fastest-developing economic region. However, the increasing cross-border economic activities create new opportunities for corruption. The purpose of this paper is to assess the impact of corruption on trade facilitation using logistics performance index (LPI). This paper also examines the moderating effect of governance or government effectiveness (GE) on the relationship between corruption and LPI within Asian countries.Design/methodology/approachA panel of time-series data from year 2007 to 2014 of 26 Asian countries was collected for analysis. Static linear panel models which comprised of pooled ordinary least squares, fixed-effect model and random-effect model were utilised to analyse the panel data.FindingsThe findings show that corruption significantly affects LPI and each of the six dimensions in LPI. The results also show that governance or GE has a moderating effect on the relationship between corruption and LPI.Practical implicationsThis study benefits Asian governments to gain a better understanding on influences of corruption on trade facilitation and triggering suggestions of a government role in the relationship. Practically, the results could be used as a guideline in improving national LPI. Besides, the findings could be used to support policy decision to modify corruption regulations at the national and regional levels.Originality/valueThis study reveals that the optimistic view of sands in the wheel overcomes the dark side of the grease in the wheel practices. To be corrupt free or less corrupt is a rare and inimitable resource capability that makes nations logistically competitive.

Controlled Foreign Companies and Tax Avoidance: International and Comparative Perspectives with Specific Reference to Polish Tax and Constitutional Law, EU Law and Tax Treaties

A lion’s share of global investments is likely being conducted for tax avoidance purposes via controlled foreign companies (CFC) which are established in tax havens or low tax jurisdictions. Avoiding tax via CFCs causes several problems, in particular it: (i) leads to unfair and unbalance taxation of income; (ii) may widen the gap between the poorest and the richest that may further adversely affect sustainable development; (iii) erodes the tax base of the States that undermines the integrity of the tax system; and (v) it can harm fair competition among enterprises. Considering the negative consequences of tax avoidance via CFCs, I have worked hard to improve provisions specifically designed to prevent tax avoidance via CFCs – CFC rules. As a result of in depth international and comparative research and analysis, I submitted a set of proposals for designing CFC rules in order to increase the ability of States to effectively prevent tax avoidance schemes while shielding at the same time genuine cross-border economic activities. Even though the analysis and conclusions (proposals) concern the Polish CFC rules in principle, they are, mutatis mutandis, relevant to the CFC rules of other countries as well, and may be used as a yardstick by countries without CFC rules at present to draft rules of their own. The proposals ensure the appropriate balance between preservation of the domestic tax base while fostering competitiveness, are compatible with EU/EEA law and tax treaties, and reflect the most recent thinking of the OECD on the issue under BEPS. Thus, the proposals may contribute to fair and balance taxation of income, narrow gap between the poorest and the richest that may positively affect sustainable development. Once the proposals are implemented by concerned States, there may be no reason to insert the conjunction “and” between controlled foreign companies and tax avoidance.