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on Accounting |
| By: | Goergen,M.; Manjon,M.C.; Renneboog,L. (TILEC (Tilburg Law and Economics Center)) |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubtil:2004014&r=acc |
| By: | Goergen,M.; Renneboog,L.; Correia da Silva,L. (TILEC (Tilburg Law and Economics Center)) |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubtil:2004013&r=acc |
| By: | Xavier Freixas; Dimitrios P. Tsomocos |
| Abstract: | The aim of this paper is to examine the pros and cons of book and fair value accounting from the perspective of the theory of banking. We consider the implications of the two accounting methods in an overlapping generations environment. As observed by Allen and Gale(1997), in an overlapping generation model, banks have a role as intergenerational connectors as they allow for intertemporal smoothing. Our main result is that when dividends depend on profits, book value ex ante dominates fair value, as it provides better intertemporal smoothing. This is in contrast with the standard view that states that, fair value yields a better allocation as it reflects the real opportunity cost of assets. Banking regulation play an important role by providing the right incentives for banks to smooth intertemporal consumption whereas market discipline improves intratemporal efficiency. |
| Keywords: | Banking, shocks, insurance, intertemporal, Overlapping Generations Equilibrium |
| JEL: | E44 G21 |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:771&r=acc |
| By: | David Hirshleifer (Fisher College of Business, Ohio State University); KEWEI HOU (Fisher College of Business, Ohio State University); Siew Hong Teoh (Fisher College of Business, Ohio State University); YINGLEI ZHANG (Fisher College of Business, Ohio State University) |
| Abstract: | If investors have limited attention, then accounting outcomes that saliently highlight positive aspects of a firm's performance will promote high market valuations. When cumulative accounting value added (net operating income) over time outstrips cumulative cash value added (free cash flow), it becomes hard for the firm to sustain further earnings growth. When the balance sheet is 'bloated' in this fashion, we argue that investors with limited attention will overvalue the firm, because naïve earnings-based valuation disregards the firm's relative lack of success in generating cash flows in excess of investment needs. The level of net operating assets, the difference between cumulative earnings and cumulative free cash flow over time, is therefore a measure of the extent to which operating/reporting outcomes provoke excessive investor optimism. Therefore, if investor attention is limited, net operating assets will negatively predict subsequent stock returns. In our 1964-2002 sample, net operating assets scaled by beginning total assets is a strong negative predictor of long-run stock returns. Predictability is robust with respect to an extensive set of controls and testing methods. |
| Keywords: | valuation, financial reporting, limited attention, behavioral economics, behavioral accounting, behavioral finance, market efficiency, psychology and economics |
| JEL: | G |
| Date: | 2004–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpfi:0412001&r=acc |
| By: | Bogt, H.J. ter (Groningen University) |
| Abstract: | The Dutch housing sector saw some major changes since about 1990. After decades of strong central government regulation and support, the social rented sector and housing corporations had to become more autonomous and financially independent. Consequently, housing corporations had to implement several changes in their financial management and other management control aspects. On the basis of research questions which were based on contingency theory and sociological institutional theory, case research was conducted in two housing corporations, a relatively large and a relatively small one. The research shows that the large corporation implemented more radical changes in its financial management and operational management. Further, the results indicate that the two corporations implemented the changes because they were striving for more economic efficiency and continuity of their organization. However, as sufficient numerical data were lacking, it was not really possible to evaluate the development of economic efficiency. The research findings also suggest that, apart from economic rationality, a striving for socially rational behaviour also may have influenced the changes which were implemented in the two corporations. This means that contingency theory as well as institutional theory provided aspects that were relevant to explain the changes in financial management which were implemented by the two corporations. |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:rugsom:04d24&r=acc |
| By: | Calcagno,R.; Renneboog,L. (TILEC (Tilburg Law and Economics Center)) |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubtil:2004015&r=acc |
| By: | Christopher Nobes; Ester Oliveras; Xavier Puig |
| Abstract: | The degree of connection between tax and financial reporting is regarded as a key factor in the study of international accounting differences. The position for Spain is briefly outlined in previous research but without examination of any specific accounting issues except, in outline only, depreciation and the tax-free revaluation of assets from 1977 to 1983. The absence of a detailed study of the major tax/accounting linkages for Spain is of particular importance because the relationship is regarded as having changed dramatically in the early 1990s, from a position of tax dominance. In order to measure the links between tax and financial reporting, we adopt the methodology of Lamb et al. (1998) by assessing major accounting topics using a five-case classification shown as Table 1. We refute the proposition that suggests that the link between tax/accounting has been reduced substantially. |
| Keywords: | Tax, accounting, Spain |
| JEL: | M41 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:782&r=acc |
| By: | Paola Ferretti (University of Venice) |
| Abstract: | In the contest of environmental management, the problem of minimizing the expected cost due to random checking processes and a possible failure is here addressed. Non-homogeneous Poisson checking processes with continuous non-decreasing intensity are considered, leading to the explicit detection of the sub-optimal solution for exponential or uniform failure density functions. The dynamic of the optimal solution is then analized using the phase-diagram tool. |
| Keywords: | Environmental management; audit scheme; random inspections; non-homogeneous Poisson checking process; optimal control; exponential failure density function; uniform failure density function. |
| JEL: | Q2 |
| Date: | 2004–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpga:0411010&r=acc |
| By: | David Hirshleifer (Fisher College of Business, Ohio State University); SONYA SEONGYEON LIM (DePaul University); Siew Hong Teoh (Fisher College of Business, Ohio State University) |
| Abstract: | In our model, informed players decide whether or not to disclose, and observers allocate attention among disclosed signals, and toward reasoning through the implications of a failure to disclose. In equilibrium disclosure is incomplete, and observers are unrealistically optimistic. Nevertheless, regulation requiring greater disclosure can reduce observers' belief accuracies and welfare. A stronger tendency to neglect disclosed signals increases disclosure, whereas a stronger tendency to neglect failures to disclose reduces disclosure. Observer beliefs are influenced by the salience of disclosed signals, and disclosure in one arena can crowd out disclosure in other fundamentally unrelated arenas. |
| Keywords: | Disclosure policy, disclosure regulation, limited attention, behavioral economics, behavioral accounting, behavioral finance, market efficiency, psychology and economics |
| JEL: | M41 D82 G14 G18 |
| Date: | 2004–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpga:0412002&r=acc |
| By: | Stanley C. W. Salvary (Canisius College) |
| Abstract: | The Quantity Theory of Money is implicitly embedded in the arguments for price level adjusted financial statements - inflation accounting. Historically, the instability of commodity prices, which is due to changes in relative prices, is considered by one school of economic thought (monetarism) as a reflection of the instability of the value of nominal money. Monetarists maintain that it is the level of the money supply which accounts for the instability of commodity prices. Hence, (1) all changes in the level of the money supply is deemed responsible for changes in the general level of prices, and (2) with each increase in the general level of prices, paper money is said to lose value. In a money economy, nominal money prices reflect the underlying exchange ratios of the various commodities that are produced and exchanged for nominal money. In the absence of monetary dislocation (monetary revaluation or devaluation), any change in the nominal price of a commodity reflects a change in its purchasing power (a change in its exchange ratio vis-a-vis other commodities). Since the physical form of a commodity is relatively constant while the price varies, the simultaneity of these two conditions produces a sensory illusion that leads the monetarists to argue that the measuring device (money) is defective. This paper attempts to demonstrate (in the absence of monetary dislocation): (1) the stability of paper money, which makes it a valid measuring device; and (2) that the quantity theory of money, which is the basis of constant dollar accounting, is a flawed theory. |
| Keywords: | price level changes, level of money supply, instability of commodity prices, monetarism, price level adjusted, financial statements, general purchasing power. |
| JEL: | E |
| Date: | 2004–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0412003&r=acc |
| By: | Patricia J. Hughes (University of Southern California); Eduardo S. Schwartz (University of California, Los Angeles); Anjan V. Thakor (Washington University in St. Louis) |
| Abstract: | This paper considers a setting in which managers have private information about the values of their firms and can communicate it to uninformed investors through the use of two signals: capital structure and inventory accounting method. We show conditions under which a separating equilibrium with debt alone does not exist. The two-signal equilibrium involves a partitioned separation in which the highest quality firms choose FIFO and the lower quality firms choose LIFO, and all firms then distinguish themselves with these two partitions through capital structure choices. The analysis helps to explain the many observed empirical regularities about firms' capital structure choices and LIFO/FIFO choices and, in addition, produces numerous testable predictions about the relation between capital structure and inventory accounting method. |
| JEL: | G |
| Date: | 2004–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpfi:0411054&r=acc |
| By: | Richard M. bird (International Tax Program, Rotman school of Management, University of Toronto) |
| Abstract: | My aim in this paper is to explore in an admittedly discursive and preliminary fashion some aspects of the complex balancing act needed to achieve economically and politically sustainable tax systems in Latin America. By a “sustainable” tax system I mean one that is sufficiently congruent with prevailing economic and political factors in a country to persist without the need for repeated major “reforms.” Specifically, my thesis is that one key to achieving a sustainable tax system is to strike the right “balance” between the equity and efficiency aspects of taxation in terms of the equilibrium of political forces. Experience suggests that any state that wishes to both grow and to implement redistributive fiscal policies -- whether the aim be much or little redistribution -- must first establish an administrable and efficient tax system. At the same time, however, to make such a system politically sustainable, it must be considered “fair” by a majority of the politically relevant population. Essentially, I suggest in these preliminary musings on this complex subject that one reason why many countries in Latin America do not appear to have either an efficient or a fair tax system is essentially because of the very limited scope of this segment of the population, so that the politically relevant “domain” of the fiscal system is considerably smaller than the population as a whole. Some specific suggestions are made in the paper with respect to how both the efficiency and the equity outcomes of Latin American tax systems might be improved. My general conclusion, however, is the perhaps somewhat pessimistic one that a more democratic and sustainable outcome cannot, as it were, be induced by better fiscal institutions. On the contrary, a more encompassing and legitimate state is itself the key ingredient needed for a more balanced and sustainable tax system. Countries with similar economic characteristics in similar economic situations can and do have and sustain very different tax levels and structures, reflecting their different political situation. In a variant of a phrase currently popular in the literature of political economics, when it comes to tax matters, in general “politics rule.” |
| Keywords: | Tax, Latin America, sustainable tax systems, political, economic |
| Date: | 2003–06 |
| URL: | http://d.repec.org/n?u=RePEc:ttp:itpwps:0306&r=acc |
| By: | MING DONG (York University - Schulich School of Business); David Hirshleifer (Fisher College of Business, Ohio State University); SCOTT RICHARSON (University of Pennsylvania); Siew Hong Teoh (Fisher College of Business, Ohio State University) |
| Abstract: | This paper tests the hypothesis that irrational market misvaluation affects firms' takeover behavior. We employ two contemporaneous proxies for market misvaluation, pre-takeover book/price ratios and pre-takeover ratios of residual income model value to price. Misvaluation of bidders and targets influences the means of payment chosen, the mode of acquisition, the premia paid, target hostility to the offer, the likelihood of offer success, and bidder and target announcement period stock returns. The evidence is broadly supportive of the misvaluation hypothesis. |
| Keywords: | takeovers, behavioral finance, investment decisions, market efficiency |
| JEL: | G |
| Date: | 2004–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpfi:0412002&r=acc |
| By: | Satish Chand |
| Abstract: | If capital for corporate finance was available from a common global pool and at zero transaction cost, then does after-tax arbitrage require harmonisation of income tax rates across jurisdictions? This paper shows that the answer is in the negative. When a corporation has the choice in deciding the fraction of income that it distributes as dividends with the remainder held for future capitalisation, then such choice brings about arbitrage in after-tax rates of return to investors facing a common pre-tax return but different rates of income taxes. Policy implications are drawn from this result. |
| JEL: | H25 |
| Date: | 2002 |
| URL: | http://d.repec.org/n?u=RePEc:idc:wpaper:idec02-1&r=acc |
| By: | C. Mirjam van Praag (Faculty of Economics and Econometrics, Universiteit van Amsterdam); Justen van der Sluis (Faculty of Economics and Econometrics, Universiteit van Amsterdam); Arjen van Witteloostuijn (University Groningen, and University of Durham) |
| Abstract: | In the management literature, the locus-of-control concept has been applied extensively over the past three decades. This research note reports the results of a panel data study among a representative sample of 6,111 US young citizens who have been interviewed on a regular basis over a period of about two decades. In addition to this, various relevant personality traits and parental background characteristics have been administered before the first wave and before these young people started working. By analyzing this panel dataset, we offer three contributions to the locus-of-control literature. First, we test for the robustness of the locus-of-control effect on individual performance (in terms of hourly earnings) in the context of this impressive panel data context. Second, we explore whether or not the performance impact of the locus-of-control personality trait is different for employees vis-à-vis entrepreneurs. Third, we check whether the performance effect of an individual’s locus-of-control score interacts with her or his level of education. Our findings reveal that internality affects earnings positively, that this effect is stronger for entrepreneurs, and that education positively interacts with internality. |
| Keywords: | Entrepreneur; self-employment; earnings; return to education; locus-of-control; personality |
| JEL: | M13 J24 J31 N3 C33 |
| Date: | 2004–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20040130&r=acc |
| By: | Ming Dong (York University - Schulich School of Business); Chris Robinson (York University - Atkinson School of Administrative Studies); Chris Veld (Simon Fraser University - Faculty of Business Administration) |
| Abstract: | The question of why individual investors want dividends is investigated by submitting a questionnaire to a Dutch investor panel. The respondents indicate that they want dividends partly because the cost of cashing in dividends is lower than the cost of selling shares. Their answers provide strong confirmation for the signaling theories of Bhattacharya (1979) and Miller and Rock (1985). They are inconsistent with the uncertainty resolution theory of Gordon (1961, 1962) and the agency theories of Jensen (1986) and Easterbrook (1984). The behavioral finance theory of Shefrin and Statman (1984) is not confirmed for cash dividends but is confirmed for stock dividends. Finally, our results indicate that individual investors do not tend to consume a large part of their dividends. This raises some doubt as to whether a reduction or elimination of dividend taxes will stimulate the economy. |
| Keywords: | Dividends, individual investors, survey |
| JEL: | G30 G35 G38 |
| Date: | 2004–12–04 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpfi:0412009&r=acc |
| By: | John Joseph Wallis |
| Abstract: | The critical role of governance in the promotion of economic development has created intense interest in the manner in which the United States eliminated corruption. This paper examines the concept of corruption in American history; tracing the term corruption to its roots in British political philosophy of the 17th and 18th century, and from there back to Machiavelli, Polybius and Artistole. Corruption was defined prior to 1850 in a way that was significantly different from how it was defined in the Progressive Era. "Systematic corruption" embodied the idea that political actors manipulated the economic system to create economic rents that politicians could use to secure control of the government. In other words, politics corrupts economics. The classic cure for systematic corruption was balanced government. Americans fought for independence because they believed that the British government was corrupt. The structure of American constitutions was shaped by the need to implement balanced government. Conflict and debate over the implementation of balanced government dominated the political agenda until the 1840s, when states began moving regulatory policy firmly towards open entry and free competition. By the 1890s, systematic corruption had essentially appeared from political discourse. By then corruption had come to take on its modern meaning: the idea that economic interests corrupt the political process. What modern developing countries with corrupt governments need to learn is how the United States eliminated systematic corruption. |
| JEL: | B1 N0 N2 N4 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:10952&r=acc |
| By: | Benito Arruñada; Manuel González; Alberto Fernández |
| Abstract: | We explain why European trucking carriers are much smaller and rely more heavily on owner-operators (as opposed to employee drivers) than their US counterparts. Our analysis begins by ruling out differences in technology as the source of those disparities and confirms that standard hypotheses in organizational economics, which have been shown to explain the choice of organizational form in US industry, also apply in Europe. We then argue that the preference for subcontracting over vertical integration in Europe is the result of European institutions—particularly, labor regulation and tax laws—that increase the costs of vertical integration. |
| Keywords: | Transaction costs, governance, hybrids, transportation |
| JEL: | D23 L14 L22 L92 |
| Date: | 2004–06 |
| URL: | http://d.repec.org/n?u=RePEc:upf:upfgen:767&r=acc |
| By: | JS Armstrong (The Wharton School - University of Pennsylvania); Fred Collopy (Case Western Reserve University,) |
| Abstract: | Managers are often advised, 'beat your competitors,' which sometimes contrasts with the advice, 'do the best for your firm.' This may lead managers to focus on comparative measures such as market share. Drawing on game theory, the authors hypothesize that managers are competitor oriented under certain conditions, in particular, when they are provided with information about competitors' performance. Empirical studies lead to the additional hypothesis that a competitor orientation is detrimental to performance. To examine these hypotheses, the authors conduct two studies. The first is a laboratory study in which 1,016 subjects made pricing decisions. When information about the competitor's profits was provided, over 40% of the subjects were willing to sacrifice part of their company's profits to beat or harm the competitor. Such competitor-oriented behavior occurred across a variety of treatments. The second is a field study used to examine the performance over a half- century of 20 large U.S. firms with differing objectives. Firms with competitor-oriented (market, share) objectives were less profitable and less likely to survive than those whose objectives were directly oriented to profits. |
| Keywords: | management, decisions, |
| JEL: | A |
| Date: | 2004–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpgt:0412014&r=acc |
| By: | JS Armstrong (The Wharton School - University of Pennsylvania); Roderick J. Brodie (Department of Marketing, University of Auckland,) |
| Abstract: | Subjects (n = 1015) working individually in the role of managers were asked to choose between investment opportunities that would either double their investment or cause the loss of half of it. Six administrators ran experiments on 27 occasions in six countries over a five-year period. Information about the BCG matrix increased the subjects' likelihood of selecting the project that was clearly less profitable. Of subjects exposed to the BCG matrix, 64% selected the unprofitable investment. Of subjects who used the BCG matrix in their analysis, 87% selected the less profitable investment. |
| Keywords: | decision making, marketing, portfolio planning methods |
| JEL: | A |
| Date: | 2004–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpgt:0412016&r=acc |
| By: | Jack M. Mintz (Rotman School of Management, University of Toronto, and the C.D. Howe Institute) |
| Abstract: | In most countries, substantial business activity is related to financial intermediation: banking, trusts, investment companies and insurance. Financial businesses play a crucial role in the economy by matching lenders with borrowers as well as facilitating governance of businesses through close monitoring of funds lent to businesses. Financial institutions also reduce risk faced by investors by pooling investments over many different types of business activities and insuring against property, casualty and death risks. A significant part of the financial sector is regulated but an impressive array of financial activities is undertaken by unregulated and informal parts of the economy. Unlike other industries, tax systems often treat financial activity in a special way. Why is this so? In this module, I shall review the rationale and technical issues related to the taxation of financial activity by answering the following questions: What is financial intermediation? What are the roles of financial service providers in the economy so as to guide policy makers regarding the appropriate design of taxes? How are individual types of taxes designed to deal with special considerations related to financial activities? What are the economic impacts of taxes on financial activity? |
| Keywords: | Financial institutions, taxation, financial intermediation, financial activity, policy, tax design |
| Date: | 2003–12 |
| URL: | http://d.repec.org/n?u=RePEc:ttp:itpwps:0305&r=acc |
| By: | Richard M. Bird (International Tax Program, Rotman School of Management, University of Toronto); Sally Wallace (Georgia State University) |
| Abstract: | This paper is concerned with the extent to which “presumptive taxation” can be an effective tool to cope with what are commonly called the “hard-to-tax”. While the HTT category is seldom very clearly defined -- often, for example, it excludes those at the top of the power pyramid who manage to save themselves from the full fury of the taxman in accepted (or at least untouchable) ways -- it appears to encompass much of the so-called “informal” (“hidden” “shadow” “underground”) economy that is such a prominent feature of economic reality in many developing and transition countries (Schneider, 2003. Although much of the discussion in this paper covers the use (and abuse) of presumptive taxes in general, our specific focus is on the special simplified tax regimes that have been put into place recently in a number of transitional countries. In Section 2 of the paper, we define more precisely the intended objectives of such systems. In Section 3 we review briefly two of the simplified regimes just mentioned -- those in Ukraine and Russia. Against this background, in Section 4 we analyze the implications of these special regimes in terms of their impact on economic efficiency, equity, and overall tax administration and compliance. Finally, we conclude in Section 5 with a brief discussion of the critical problems of developing an “exit strategy” from such special regimes as well as some alternative policies that may prove more promising paths to taxing the HTT. |
| Keywords: | Hard to tax, presumptive tax, VAT, HTT, tax administration, tax evaders, evasion, taxation, Ukraine, Russia |
| Date: | 2003–12 |
| URL: | http://d.repec.org/n?u=RePEc:ttp:itpwps:0307&r=acc |
| By: | Richard M. Bird (International Tax Program, Rotman School of Management, University of Toronto); Enid Slack (Enid Slack Consulting Inc.) |
| Abstract: | The aim of this paper is to review from a fiscal perspective the different models of governing structure found in metropolitan areas around the world. The fiscal perspective is important. While there is considerable dispute in the literature (e.g. Klink, 2002; Divay and Wolfe, 2002; Lefevre, 2003) as to exactly how, and how much, the design of governing institutions matters in affecting outcomes, it is indisputable that money matters: who has it, where does it come from, and under what conditions it can be spent and by whom. How public expenditures are financed directly affects the feasibility of any developmental proposal or service provision goal and is thus always a key issue in any city or metropolitan area strategy (World Bank, 2002). In particular, experience suggests strongly that the ability to “self-finance”--that is, to be free to at least some extent from the whims and wishes of others -- is a critical factor in determining which metropolitan institutions live and thrive and which fade away or die in bickering between contending financial supporters. We set out the key parameters of four models of government structure used around the world (one-tier, two-tier, voluntary cooperation, and special districts). We evaluate how these different models work in practice, drawing on real-world examples to illustrate the argument. We consider how well each model achieves coordination of service delivery over the entire metropolitan area, the extent to which they allow for the equitable sharing of costs of services throughout the metropolitan area, and their ability to reduce negative or positive spillovers of service delivery across local boundaries. We examine some aspects of local government expenditures and also look at main sources of revenue, evaluating the advantages and disadvantages of different revenue-raising tools for different governing structures. Finally, we summarize our findings on the fiscal aspects of governance for metropolitan regions around the world and made a few suggestions with respect to possible future fiscal developments in Latin American metropolitan regions. |
| Keywords: | metropolitan, agglomeration economies, knowledge-based economy, innovation, local, urban, government, government structure, Latin America |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:ttp:itpwps:0401&r=acc |
| By: | Puja Guha (Delhi School of Economics); Shivani Daga (Delhi School of Economics); Richa Gulati (Delhi School of Economics); Ganita Bhupal (Delhi School of Economics); Hena Oak (Delhi School of Economics) |
| Abstract: | Over the past 15 years, financial markets have become increasingly global. The relationship among the equity markets of the developed and the emerging countries has been examined extensively in the literature. This paper studies the interdependence among the major stock markets of the world. Using the monthly data from January 1993 to September 2003, we examine the stock market indices of India (Sensex), Hong Kong (Hang Seng), the USA (DJIA) and the UK (FTSE-100). Co-integration technique has been employed to study the long-term linkages among the markets. We found that the equity markets of India and Hong Kong are co-integrated with the other markets whereas the markets of the USA and UK are not. |
| Keywords: | Direct financial integration, segmentation, co-integration |
| JEL: | G |
| Date: | 2004–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpfi:0412013&r=acc |
| By: | Rama Prasad Kanungo (Asian Accounting, Finance & Business Research Unit) |
| Abstract: | Security analysts, analyst forecast and market reaction are anecdotal in restructuring transactions, sometime conflicting and some other time imperative to the process of transaction. This article attempts to highlight a consistent association between analyst, market reaction and corporate restructuring. A close intermediation between those themes is analysed in this article, implying the relationship is contiguous. However issues of delayed price adjustment, conglomerate stock break-ups and negative earnings surprises are not discussed in this paper, though such factors are ingeniously important and crucial to the process of corporate restructuring. |
| Keywords: | Security Analysts, Forecasting and Agency Cost |
| JEL: | G32 G34 G39 |
| Date: | 2004–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpfi:0411039&r=acc |
| By: | Nirvikar Singh (University of California, Santa Cruz) |
| Abstract: | This paper discusses the possibilities for broad-based IT-led economic growth in India, including increasing value-added, using better telecom links to capture more benefits domestically through offshore development for developed country firms, greater spillovers to the local economy, broadening the IT industry with production of telecom access devices, improving the functioning of the economy through a more extensive and denser communications network, and improving governance. We also examine the policy environment, arguing that government policy is better focused on removing labor market distortions and infrastructure constraints, rather than providing output or export subsidies to the software industry. |
| Keywords: | information technology, software, complementarities, telecommunications |
| JEL: | M21 L63 O12 O3 |
| Date: | 2004–12–07 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0412007&r=acc |
| By: | Randall Morck |
| Abstract: | Arguments for eliminating the double taxation of dividends apply only to dividends paid by corporations to individuals. The double (and multiple) taxation of dividends paid by one firm to another %uF818 intercorporate dividends - was explicitly included in the 1930s as part of a package of tax and other policies aimed at eliminating United States pyramidal business groups. These structures remain the predominant form of corporate organization outside the United States. The first Roosevelt administration associated them with corporate governance problems, corporate tax avoidance, market power, and an objectionable concentration of economic power. Future tax reforms in the United States should mind the original intent of Congress and the President regarding intercorporate dividend taxation. Foreign governments may find the American experience of value should they desire to eliminate their business groups. |
| JEL: | H1 G3 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:10944&r=acc |
| By: | Eswar S. Prasad; Kenneth S. Rogoff; Shang-Jin Wei; M. Ayhan Kose |
| Abstract: | This paper provides a comprehensive assessment of empirical evidence about the impact of financial globalization on growth and volatility in developing countries. The results suggest that it is difficult to establish a robust causal relationship between financial integration and economic growth. Furthermore, there is little evidence that developing countries have been consistently successful in using financial integration to stabilize fluctuations in consumption growth. However, we do find that financial globalization can be beneficial under the right circumstances. Empirically, good institutions and quality of governance are crucial in helping developing countries derive the benefits of globalization. Similarly, macroeconomic stability appears to be an important prerequisite for ensuring that financial globalization is beneficial for developing countries. Finally, countries that employ relatively flexible exchange rate regimes and succeed in maintaining fiscal discipline are more likely to enjoy the potential growth and stabilization benefits of financial globalization. |
| JEL: | F15 F36 F41 F43 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:10942&r=acc |
| By: | Bosch-Sijtsema, P.; Postma, T.J.B.M. (Groningen University) |
| Abstract: | The knowledge-based view (KBV) of firms has received increasingly attention. A relatively unexplored area is knowledge transfer in project-based industries (PBIs). Traditional project management literature relies upon combining expertise from several internal and external parties in order to deliver their own capabilities in a one-off process. Due to the unique character of projects, knowledge of projects is difficult to transfer. Furthermore, the short-term perspective and fluctuating partners make it harder to develop new knowledge in cooperation with parties in the network. This paper aims at developing a conceptual framework for investigating innovation in PBI from a network perspective. We discuss knowledge properties of the project-based organization (PBO) and its network, governance relationships that affect the knowledge transfer and the impact of the industry context on knowledge transfer and innovation performance. We present illustrations from the construction industry and end with a set of propositions. |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:rugsom:04b18&r=acc |
| By: | Ronald Goettler; Phillip Leslie |
| Date: | 2003–10 |
| URL: | http://d.repec.org/n?u=RePEc:cmu:gsiawp:1090529974&r=acc |
| By: | Richard M. Bird (International Tax Program, Rotman School of Management, University of Toronto); Jorge Martinez-Vazquez (Andrew Young School of Public Policy, Georgia State University); Benno Torgler (University of Basel) |
| Abstract: | The main theme of this paper is that a more legitimate and responsive state appears to be an essential precondition for a more adequate level of tax effort in developing countries. While at first glace giving such advice to poor countries seeking to increase their tax ratios may not seem more helpful than telling them to find oil, it is presumably more feasible for people to improve their governing institutions than to rearrange nature’s bounty. Furthermore, improving social institutions, such as enhancing the rule of law and reducing corruption, may not take longer nor be necessarily more difficult than changing the opportunities for tax handles and economic structure, such as the relative share of the non-agriculture sector in the economy or the weight of imports and exports in GDP. The most important contribution of this paper is to extend the conventional model of tax effort by showing that not only do supply factors matter, but that societal institutions (demand factors) also determine tax effort to a significant extent. |
| JEL: | H11 H20 O17 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:ttp:itpwps:0411&r=acc |
| By: | Duanjie Chen (University of Toronto) |
| Abstract: | The primary objective of this report is to assist Jordan’s Minister of Industry & Trade and Minister of Finance to formulate a new program of investment incentives, based on international best practice, to be used as the basis for regulations to support “The Investment Law of 2003”. The paper summarizes the main weaknesses of Jordan’s current incentive program. Because of these weaknesses, Jordan’s long history of investment incentives has proven not to attract significant capital investment in areas favored by government. Instead, these measures have simply eroded the base for tax revenue. The paper compares Jordan to its major competitors for foreign investment with the region, namely Egypt, Israel, Tunisia, and the United Arab Emirates (UAE)/Dubai. The paper makes four recommendations which seek to eliminate the tax distortions of current investment incentives, maintain Jordan’s tax competitiveness in the region, remove unnecessary administrative and compliance costs, and improve the government’s capacity to generate revenue. These recommendations are consistent with the anticipated, comprehensive tax reform that will lead to a fully modernized tax system in Jordan. |
| Keywords: | Jordon, tax incentives, Jordon Vision 2020, tax, tax competitiveness, tax reform, foreign investment, Middle East, Egypt, Israel, Tunisia, United Arab Emirates |
| Date: | 2004–09 |
| URL: | http://d.repec.org/n?u=RePEc:ttp:itpwps:0412&r=acc |
| By: | Céline Azémar (TEAM); Rodolphe Desbordes (TEAM); Jean-Louis Mucchielli (TEAM) |
| Abstract: | This paper analyses the impact of tax sparing agreements on Japanese foreign direct investment (FDI) distribution in developing countries. These agreements are sometimes concluded between a developed country and a developing country which grants fiscal incentives to foreign investors. In that case, the former agrees not to tax its outward investors in order that the host country fiscal advantage is not compensated for by the increase in its own income taxes. Apart from the United States, the majority of developed countries have included these tax sparing provisions in their fiscal bilateral treaties with developing countries. Their inmpacts are observed on the distribution of Japanese FDI outflows and average size of capital transaction, on the Japanese firm sales and employment as well as on the difference between the Japanese and U.S. FDI shares, over the 1989-2000 period. The empirical results suggest that each additional year, subsequent to the signature of a tax sparing agreement, increases Japanese FDI activity by 1.7-11%. These findings are robust to the use of an instrumental variable specification and give empirical support to the debate on the exclusion or not of these provisions under the bilateral tax treaty. Thus, this study confirms that tax sparing agreements can be useful instruments to increase the attractiveness of a developing country. |
| Keywords: | Foreign direct investment, fiscal incentives, tax sparing |
| JEL: | F23 H25 H32 |
| Date: | 2004–06 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:bla04047&r=acc |