Browsing by Author "Larrain, Felipe"

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    Corporate taxes and the demand for labor and capital in developing countries
    (2010) Cerda, Rodrigo A.; Larrain, Felipe
    This article provides evidence about the impact of corporate taxation on both labor and capital demand by private companies in a developing economy, using firm level data from Chile. Our results show that higher corporate tax rates reduce not only the demand for capital, but also the demand for labor due to complementarities between both inputs. An interesting element of the results presented in this article is the asymmetry between the effects of taxation according to company size. The impact on labor demand is significantly higher in large corporations than in small enterprises, while the demand for capital is more responsive to corporate tax changes in small firms. We can explain these results based on differences in credit constraints according to firm size.
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    Natural laboratories in emerging countries and comparative advantages in science: Evidence from Chile(sic)(sic)(sic)Palabras clave
    (2021) Aguilera, Jose Miguel; Larrain, Felipe
    Entering the knowledge society and mobilizing science and technology are critical for emerging countries (ECs) to address important challenges of society and promote long-term economic growth. Natural laboratories (NLs) are geographical or geophysical singularities that provide comparative advantages and leverage to ECs for scientific research and international collaboration. Based on empirical evidence and learning experiences from five NLs in Chile, we propose the foundations of a conceptual framework for public scientific policies based on NLs and their possible implementation in ECs. Scientific research in NLs may address local, national, and global societal challenges while decentralizing scientific activities, encouraging transdisciplinary research in territories, anticipating the effects of climate change, and protecting biodiversity while promoting international partnerships and alignment with 2030 Sustainable Development Goals.
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    Resource Windfalls and Public Sector Employment: Evidence from Municipalities in Chile
    (2019) Larrain, Felipe; Perello, Oscar
    We study the effect of extra resource revenues on employment expenditures at the municipal level in Chile. We exploit a novel quasi-experiment: a legal reform in 2005 that increased the portion of the income collected from mining licenses that is assigned to municipalities where mines operate from 30 to 50 percent. Our main result is a statistically significant expansion of municipal employment expenditures in mining municipalities, driven by expenditures on long-term employment. Additionally, we found a meaningful effect on allowances to the municipal council, but we did not find a robust impact on transfers to health, transfers to community programs, or municipal investment, while the increase in transfers to education is small with respect to the employment expenditures effect. These results are complemented by evidence of an increase in the mayor's probability of reelection not related to the provision of public goods, which links our findings with the clientelism mechanism of resource rents. Our results also have several implications for the fiscal decentralization debate in resource-abundant economies.