Esta tesis analiza dos características de los mercados financieros internacionales que no son totalmente comprendidos en economía: El sesgo de los portafolios de inversión hacia papeles de la misma nacionalidad del inversionista y el financiamiento de proyectos de largo plazo con deuda de corto plazo en economías emergentes. El primer capítulo considera el efecto de las perturbaciones de demanda combinadas con rigideces nominales en la formación de portafolios de inversión y cómo esto lo sesga hacia inversiones domésticas. El segundo capítulo analiza cómo la existencia de deuda de corto plazo, al generar riesgo de iliquidez, permite a los inversionistas internacionales obtener tasas de interés más altas que las que obtendrían en inversiones nacionales. Luego el capítlo presenta una explicación de cómo la estructura financiera internacional puede llevar a que el mercado genere préstamos de corto plazo para beneficiar a los inversionistas internacionales en detrimento de las economías emergentes

Political fragmentation has been widely recognized by political economists as an important cause for fiscal profligacy in democratic market economies because of the common pool nature of fiscal resources. These redictions, however, sit uneasily with the notion of governmental veto players’ ability to block each other’s spending plans for electoral purposes. Applying the logic of a bargaining-game between veto players in a political budget cycle framework, I first model that multiple players in the budget game are in fact likely to moderate pre-electoral budget outcomes. Empirical results from a cross-section time-series analysis in EU member states provide corroborative evidence that fiscal electioneering is indeed more prevalent among cohesive, single party settings. The findings are robust to alternative identification of elections, fiscal changes and sample selection.

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This thesis investigates the impact of corporation tax on leverage, systematic risk and leasing by using the changes in corporation tax effected through the corporation tax reform of 1984. I also investigate whether there was any relationship between ownership structure of a firm and its response to the 1984 reform. Whereas theoretical models suggest that corporation tax influences corporate financial policy, extant empirical findings provide inconclusive evidence to support the tax theories of capital structure. The inconclusive findings from earlier studies are attributable to the methodology used and a failure to perfectly isolate the impact of corporation tax from that of other variables that affect leverage. I effectively curb this deficiency by analysing the effects of corporation tax on leverage, equity beta and leasing around the corporation tax reform period by using both cross-sectional and time series analysis. My empirical results show that the corporation tax reform of 1984 affected debt-equity ratios negatively. These findings imply that corporation tax influence firm's capital structure decision. Furthermore, there is evidence that taxable profits increased significantly during the reform period. Effective corporation tax rates and non-debt tax shields are found to substitute each other and both have a significant influence on firms' capital structure decisions. Similar to the findings of previous UK studies, leasing and debt financing are found to be substitutes. The results show further that the corporation tax reform of 1984 increased the attractiveness of leasing to the UK firms. Sector-based-analysis shows that in general UK manufacturing firms have high lease rate than other sectors analysed. Empirical findings show also that effective corporation tax rate has significant effect in firm's systematic risk as measured by equity beta. Concerning the relationship between the responses of firms to the reform and their ownership structures the evidence shows that the changes in debt-equity ratios and investment induced by the corporation tax reform of 1984 was related to managerial ownership. Generally, the findings of this study show clearly that corporation tax is a major factor that influences both cross-sectional and periodic variations in debt-equity ratios.

I present three essays in this thesis. The first essay investigates the decision of small businesses with respect to an optional Flat Rate Scheme (FRS) in the UK. FRS replaces VAT with a turnover tax providing some traders with a tax saving opportunity. Using the universe of VAT returns between 2004-05 and 2010-11, I find 26 percent of eligible traders have non-negative tax gains from FRS. I show gains are highly persistent and not so small, yet only 3 percent of gainers join the scheme after one year. Temporal and spatial correlations point to information frictions and learning as potential explanatory factors. Results show traders registering after introduction of FRS and those registering in high FRS density areas are more likely to join the scheme. The second essay estimates stimulus effect of the temporary reduction in the standard VAT rate in the UK. From 1 December 2008 to 31 December 2009, the standard-rate was reduced from 17.5 to 15 percent. I use the universe of VAT returns submitted to HMRC between 2002 and 2010q1q4 and compare changes in sales growth of standard-rated traders during the cut to that of zero-rated traders (difference-in-differences). To control for heterogeneous recession effects, I first rely solely on post-recession observations and utilize the fact that the cut and the recession don't fully overlap. Second, I allow for sector specific recession impacts. Both strategies show a small insignificant impact on gross sales and purchases which suggest a proportionate increase in quantity demanded in response to the tax induced price cut. The third essay estimates the impact of Iran Iraq war on educational attainment of children. I use a two percent sample of 2006 Iran Population Census, and compare exposed cohorts in war provinces to unexposed cohorts (difference-indifferences). The estimates suggest probability of finishing high school is respectively reduced by 4.8 and 1.9 percentage points for cohorts exposed to war in early childhood and those exposed during schooling (former significant at 10 percent, latter insignificant). Interestingly, the war impact on early childhood cohorts is robust to controlling for differential linear trends while the impact on school cohorts is not.

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Evidence from the consumer behaviour literature show that people like private costs to either precede or occur at the same time as the benefits. No one wants to pay for a vacation after it has become a memory, or a dishwasher after it has gone to the tip. Likewise, no one wants to work for a salary that has already been spent. It is likely that similar preferences exist for communal expenditures. With this in mind, this thesis presents a series of studies into how ordinary citizens make (or want to make) communal financial decisions (i.e. cost-benefit trade-offs). The aim is to learn if people’s communal preferences are similar to their personal preferences; and if the prospective double-entry mental accounting model (Prelec & Loewenstein, 1998) – a well-supported theory of individual preferences – can explain these communal preferences. Eight studies (six communal and two personal) confirmed that people use similar mental rules to the ones prescribed by the double-entry model to make financial choices on a communal (and personal) level. That is, people prefer to have the communal costs to either precede or occur at the same time as the benefits; and when either is not possible, to minimise the temporal distance between the two. These preferences are observed for monetary gains and losses; for decisions that have a direct impact on the decision maker, or no impact at all; and for choices made between and within participants. These findings provide valuable insights for policy makers who are keen to design public finance policies that are efficient and have public support.