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on Accounting |
| By: | Carla Vieira (Faculdade de Economia da Universidade do Porto); Ana Paula Serra (CEMPRE, Faculdade de Economia da Universidade do Porto) |
| Abstract: | This paper provides evidence on abnormal returns of Portuguese privatization public offerings for the period from 1989 to 2001. Previous empirical studies report the existence of underpricing for privatized firms in the short-run and positive abnormal returns in the long run. This study explores the abnormal performance of a comprehensive sample of Portuguese privatization transactions and investigates the determinants of the observed price behavior. Our results are not supportive of the underpricing phenomenon except if we exclude the very extreme observations. The results show further that privatization IPOs underperform private sector IPOs. In the long run, we observe negative abnormal returns. While in early event months, privatization public offerings yield more negative returns than private sector offerings, this effect is reversed in longer horizon periods. Initial underpricing is thus reversed and investors seem to require higher returns in partial privatizations. |
| Keywords: | Privatization, IPOs |
| JEL: | G38 G32 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.43&r=acc |
| By: | Charles Himmelberg (Federal Reserve Bank of New York); Alessandra del Boca (Università di Brescia); Marzio Galeotti (Università di Milano); Paola Rota (Università di Brescia) |
| Abstract: | “Time to build” models of investment expenditures play an important role in many traditional and modern theories of the business cycle, especially for explaining the dynamic propagation of shocks. We estimate the structural parameters of a time-to-build model using firm-level investment data on equipment and structures. For equipment expenditures, we find no evidence of time-to-build effects beyond one period. For structures, by contrast, there is clear evidence of time to build in the range of 2-3 years. The contrast between equipment and structures is intuitively reasonable and consistent with previous results. The estimates for structures also indicate that initial-period expenditures are low, and increase as projects near completion. These results provide empirical support for including “time to plan” effects for investment in structures. More generally, these results suggest a potential source of specification error for Q models of investment and production-based asset pricing models that ignore the time required to plan, build and install new capital. |
| Keywords: | Investment expenditures, Panel data, Italian firms, Time to build |
| JEL: | D24 G31 C33 C34 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.54&r=acc |
| By: | Eduardo A. Lora (Research Department, Inter-American Development Bank); Ana Maria Herrera (Michigan State University - Department of Economics) |
| Abstract: | On average, Latin American firms are small with respect to world patterns, both in terms of the quantity of assets they control and the amount of employment they generate. We examine data on firm size from developed and developing countries around the world to assess the influence on demand, supply and institutional factors on the size of the largest firms in each country. We find that, besides the size of the economy and the level of income per capita, the key determinants of the size of firms are trade openness, stock market capitalization and physical infrastructure. Our simulations suggest that if the gaps with respect to the best Latin American performer were closed in each of these three areas, firm size in the countries of the region would - on average - reach world patterns. |
| Keywords: | firm size, Latin America, openness, financial sector, infrastructure |
| JEL: | D23 G30 K40 L20 |
| Date: | 2005–03 |
| URL: | http://d.repec.org/n?u=RePEc:idb:wpaper:2002&r=acc |
| By: | Roger Gordon; Wei Li |
| Abstract: | Tax policies seen in developing countries are puzzling on many dimensions. To begin with, revenue/GDP is surprisingly small compared with that in developed economies. Taxes on labor income play a minor role. Taxes on consumption are important, but effective tax rates vary dramatically by firm, with many firms avoiding taxes entirely by operating through cash in the informal economy and others facing very high liabilities. Taxes on capital are an important source of revenue, as are tariffs and seignorage, all contrary to the theoretical literature. In this paper, we argue that all of these aspects of policy may be sensible responses if a government is able in practice to collect taxes only from those firms that make use of the financial sector. Through use of the financial sector, firms generate a paper trail, facilitating tax enforcement. The threat of disintermediation then limits how much can be collected in taxes. Taxes can most easily be collected from the firms most dependent on the financial sector, presumably capital-intensive firms. Given the resulting differential tax rates by sector, other policies would sensibly be used to offset these tax distortions. Tariff protection for capital-intensive firms is one. Inflation, imposing a tax on the cash economy is another. |
| JEL: | H21 O23 O17 F23 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11267&r=acc |
| By: | Bernardi, Luigi; Fraschini, Angela |
| Abstract: | This paper is part of a wider research on South-East Asia countries’ taxation carried on under the supervision of. V. Tanzi. India is a federal republic and a big, highly populated and poor country, which however since some years has entered the catching up stage of development and shows impressive rates of GDP growth. General Government budget is structurally imbalanced and public debt stays high. Public spending (about 25 percent of GDP) is mainly devoted to general services, defense, and the support of economic activities, rather than to public health and welfare programs. Total fiscal pressure (about 17 percent of GDP) is in line with per capita GDP and is shared evenly enough between central and states governments. The structure of the tax system is not much beyond the Musgravian “early stage”. A complex structure of taxes on goods and services is largely the main heading of the tax system and it is difficultly moving towards a VAT-kind structure. Direct taxes still are in an infant state, both as weight as well as structure. Import duties remain at not negligible levels. Social contributions are entirely lacking. A tax system of a country like India unavoidably raises more than one problem: foremost among these problems appear to be a too large dominance of a complex and obsolete indirect taxation and the fiscal relations among government layers. The road to updating and improving the Indian tax system has been entered since the early 1990s, but the reform is still largely to be accomplished. Introducing VAT – so successfully adopted in other developing countries – is the most striking but not the only example. |
| JEL: | H20 H24 H25 H29 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:uca:ucapdv:45&r=acc |
| By: | Mahesh Kumar Tambi (ICFAI Institute for Management Teachers) |
| Abstract: | M&A and Takeovers are the powerful ways to achieve corporate growth, but because of their complex nature, to protect the interest of all the parties, curb the malpractices and to facilitate orderly development these activities are regulated by a takeover code in most part of the world. In India after liberalization Govt. started to regulate these activities by introducing a takeover code. This code has gone through various major and minor changes since then to respond the challenges it faced during implementation and also to overcome its shortcomings. My study is an attempt to discover what challenges it faced and what changes were incorporated in the code over the period of time. Whether these successive changes are leading Indian takeover code in a proper direction, also what are the major shortcomings of the code at present. What are the critical issues, which need immediate attention to make it more effective. In the paper I tried to explain these challenges by quoting major controversial takeover battles after 1990s. |
| Keywords: | Indian Takeover Code, Threshold limit, Conditional Offer, Cripping facility, Trigger point, Negotiated offer, Bail-out takeover |
| JEL: | E |
| Date: | 2005–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0504021&r=acc |