Purpose – With the acceleration of global integration and the deepening of the market economy, sustainable development is receiving unprecedented attention worldwide. Corporate environmental, social, and governance (ESG) performance is one of the most important ways of promoting sustainable...

This paper exploits a tax reform on manufacturing firms in China to study the impact of taxes on firm innovation. The reform switched the corporate income tax collection from the local to the state tax bureau and reduced the effective tax rate by 10%. The reform only applied to firms established...

We develop a New Keynesian model where all payments between agents require bank deposits, bank deposits are created through disbursement of bank loans, and banks face convex lending costs. At the zero lower bound on deposit rates (ZLBD), changes in policy rates affect activity through both real...

The theoretical investigation of the effectiveness of limited flexibility has mainly focused on the performance metric that is based on the maximum sales in units. However, this could lead to substantial profit losses when the maximum sales metric is used to guide flexibility designs whereas the...

We study the effect of domestic tax on firms' outward foreign direct investment (OFDI) decisions. We exploit a policy change in China that unifies corporate income tax rates through raising foreign firms' but reducing domestic firms' tax rates. Using a difference-in-differences estimator that...

This paper exploits a tax reform on manufacturing firms in China to study the impact of taxes on firm innovation. The reform switched the corporate income tax collection from the local to the state tax bureau and reduced the effective tax rate by 10%. The reform only applied to firms established...

We study a New Keynesian model where banks create deposits through loans, subject to increasing marginal cost of lending. Banks do not intermediate commodity deposits between savers and borrowers, instead they offer a payment system that intermediates ledger-entry deposits between spenders and...

Since the Eurozone Crisis of 2010-12, a key debate on the viability of a currency union has focused on the role of a fiscal union in adjusting for country heterogeneity. However, a fully-fledged fiscal union may not be politically feasible. This paper develops a two-country international finance...