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on Accounting |
| By: | Mihir A. Desai; Dhammika Dharmapala |
| Abstract: | How do investors value managerial actions designed solely to minimize corporate tax obligations? Using a framework in which managers' tax sheltering decisions are related to their ability to divert value, this paper predicts that the effect of tax avoidance on firm value should vary systematically with the strength of firm governance institutions. The empirical results indicate that the average effect of tax avoidance on firm value is not significantly different from zero; however, the effect is positive for well-governed firms as predicted. Coefficient estimates are consistent with an expected life of five years for the devices that generate these tax savings for well-governed firms. Alternative explanations for the dependence of the valuation of the tax avoidance measure on firm governance do not appear to be consistent with the empirical results. The findings indicate that the simple view of corporate tax avoidance as a transfer of resources from the state to shareholders is incomplete, given the agency problems characterizing shareholder-manager relations. |
| JEL: | G32 H25 H26 K34 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11241&r=acc |
| By: | Olubunmi Faleye; Vikas Mehrotra; Randall Morck |
| Abstract: | Equity ownership gives labor both a fractional stake in the firm's residual cash flows and a voice in corporate governance. Relative to other firms, labor-controlled publicly-traded firms deviate more from value maximization, invest less in long-term assets, take fewer risks, grow more slowly, create fewer new jobs, and exhibit lower labor and total factor productivity. We therefore propose that labor uses its corporate governance voice to maximize the combined value of its contractual and residual claims, and that this often pushes corporate policies away from, rather than towards, shareholder value maximization. |
| JEL: | G3 J0 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11254&r=acc |
| By: | Mário Rui Silva (CEDRES, Faculdade de Economia do Porto); Hermano Rodrigues (Faculdade de Economia do Porto) |
| Abstract: | Public-private partnerships are a recent instrument for social and economic development policies. A more decentralised policy is supposed to increase focus and effectiveness and to involve agencies that are closer to firms and that have a more narrow range of objectives. In this contribution, we analyse the pattern of the so-called PIP (Partnerships and Public Initiatives) projects, approved between 2000 and the 30th June of 2003 in the framework of the Portuguese Operational Program for the Economy. By using HOMALS and K-means cluster analysis, we were able to characterise the decentralisation pattern and to identify typical clusters for the PIP projects. The results show clearly that a greater decentralisation is linked to partnerships while public initiatives are closer to the conventional pattern of public intervention. The results also show that partnerships are mainly focused in specific sectors and / or in specific regions, being conducted by private agencies that have chiefly a sectoral or regional nature. However, we have observed a trade-off between policy decentralization and structural change goals because decentralization has originated a bias towards the present more representative sectors. Also, decentralization has generated an extremely unequal access of local economies to the PIP instrument, favoring the more developed areas of the country. |
| Keywords: | Public-private partnerships; Competitiveness policy; Decentralization |
| JEL: | H50 O20 C14 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:171&r=acc |