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on Accounting |
| By: | Manel Antelo (Universidad de Santiago de Compostela) |
| Abstract: | This paper aims to examine optimal environmental taxation in an incomplete-information two-period model in which a monopolistic firm produces and pollutes. It is assumed that the polluting firm is privately informed about its costs of production, and the policymaker, which can only infer the firm's costs from observing the output produced in the first period, has the chance to set environmental taxes to affect emissions; the emitter of pollution may then choose a non-optimal level of production in such a period in order to manipulate the policymaker's beliefs concerning its costs. If the policymaker values environmental quality sufficiently, the low-cost polluter has an incentive to misrepresent itself as a high-cost firm in order to secure a low environmental tax in the second period. This leads the high-cost polluting firm to produce, in the first period, an output level that is not higher than output which would be optimal if only short-term considerations were taken into account. The optimal environmental tax rate in the first period, when the firm's output is a signal of its cost, is then lower than or equal to what it would be if the firm's output was not a signal of firm's costs. The expected emissions in the former context are also lower than or equal to those in the latter case. By contrast, when the policymaker's valuation of the environment is sufficiently low, the environmental tax is negative (a subsidy per unit of pollutant emitted) in both the signaling and non-signaling contexts and no less in the former context than in the latter. |
| Keywords: | Environmental tax and subsidy policy, monopolistic polluting firm, vertical asymmetric information, signaling and non-signaling |
| JEL: | D62 D82 L13 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:cea:doctra:e2005_08&r=acc |
| By: | Gregory E. Sierra; Eli Talmor; James S. Wallace |
| Abstract: | This study examines executive compensation determinants in the U.S. banking industry. Multiple theories of executive pay are discussed and tested using a relatively homogenous sample. We perform an in-depth look at the corporate governance and ownership structure of the companies selected. We explore the simultaneous relationship between compensation, firm performance, and board strength, exploiting variables unique to the banking industry. Our primary finding is that after controlling for both regulatory oversight and external market discipline, a strong board is associated with higher firm performance and lower levels of executive pay, consistent with such a board of directors providing a strong monitoring function. |
| Keywords: | Executives - Salaries |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlsp:2004-02&r=acc |
| By: | Robert Tannenwald |
| Abstract: | In debating Massachusetts business tax policy, protagonists have cited many different indicators purporting to assess the fairness, adequacy, and competitiveness of the Commonwealth’s business taxes. These statistics actually reveal very little about the degree to which Massachusetts business taxes achieve these widely accepted tax policy goals. The author explains why these indicators are misleading and presents new indicators of business tax competitiveness that, although imperfect, are more accurate than those most widely quoted. The article concludes that the fairness of Massachusetts business taxes is unclear and that the Commonwealth’s corporate income taxes are inadequate. The clearest conclusion drawn is that Massachusetts business taxes do not harm its competitive standing. |
| Keywords: | Business tax - Massachusetts |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpp:04-4&r=acc |
| By: | Carlos Fernando Cuevas Villegas; Guillermo Chávez; Jhon Alberto Castillo; Nelson Marino Caicedo |
| Abstract: | Hoy en día las exigencias del cliente cada vez son mayores en cuanto a calidad, servicio y precio; es por ello que las tendencias mundiales que actualmente rigen el campo empresarial reconocen que contar con información de costos que les permita conocer cuáles de sus productos y/o servicios son rentables y cuáles no, las lleva a poseer una ventaja competitiva sobre aquellas que no la tienen, pues con dicha información la dirección puede tomar decisiones estratégicas y operativas en forma acertada. De acuerdo con lo anterior, la Clínica de los Remedios requiere de un buen sistema de costos con el cual pueda determinar con exactitud el costo de los productos y/o servicios que ofrece, así como la rentabilidad de los mismos; para ello es indispensable conocer no sólo los insumos y los recursos que requiere el producto y/o servicio, sino también las áreas relacionadas con ellos y las actividades que los involucran. Se pretende diseñar una metodología de costeo ABC y aplicarla como piloto en el área de imaginología, que actualmente desconoce parcialmente el costo de los servicios que ofrece y por ende su rentabilidad. Buscamos que la implantación de la metodología se realice integralmente y en el contexto de un proceso de planeación estratégica que incorpore en forma consistente una gestión administrativa, presupuestal y de costos enfocada por actividades. |
| Date: | 2004–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:col:000117:000974&r=acc |
| By: | Vincent Touzé (Observatoire Français des Conjonctures Économiques) |
| Abstract: | This paper deals with the particular fiscal incidence induced by an unfunded pension system. That consists to understand how the financing and the calculus of pensions modify the transitory and long run macroeconomic dynamics. We develop an OLG model with endogenous labour supply in an economy with productive capital. A tax on the labour income is used to finance pensions. During the retirement, a part of the amount of the pension is exogenous and the other part is linked to the contributive effort during the working period. The method of analysis is not numerical but analytical. The results concern the identification of the steady state and the transitory dynamics. Then we proceed to a sensitive study of the dynamics with respect to changes of the payroll tax or the degree of contribution. |
| Keywords: | monetary retirement, labor income tax, OLG models. |
| JEL: | D91 H55 J26 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:0503&r=acc |
| By: | Robert Tannenwald; Nicholas Turner |
| Abstract: | This paper compares states in terms of their relative fiscal capacity, fiscal need, fiscal comfort, and tax effort in state fiscal year 1999 (FY1999). It is the most recent in a series initiated by the U.S. Advisory Commission on Intergovernmental Relations (ACIR) in 1962. As in previous studies, the authors use the representative tax system and representative expenditure system methodologies in their analysis. Compared with FY1997, the authors find less interstate disparity in fiscal capacity, fiscal need, and fiscal comfort. However, such disparity, though diminished, remains substantial. The New England and Mid-Atlantic regions remain the most “fiscally comfortable,” while the East South Central and West South Central regions are still the most “fiscally stressed.” |
| Keywords: | State finance ; Taxation |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedbpp:04-9&r=acc |
| By: | Mark Spiegel; Nobuyoshi Yamori |
| Abstract: | We examine the determinants of Japanese regional bank decisions concerning pricing unrealized losses or gains to market. We also examine the impact of these decisions on the intensity of depositor discipline, in the form of the sensitivity of deposit growth to bank financial conditions. To obtain consistent estimates of depositor discipline, we first model and estimate the bank pricing-to-market decision and then estimate the intensity of depositor discipline after conditioning for that decision. We find that banks were less likely to price to market the larger were their unrealized securities losses. We also find statistically significant evidence of depositor discipline among banks that elected to price their assets to market. Our results indicate that depositor discipline was more intense for the subset of banks that priced-to-market, suggesting that increased transparency may enhance depositor discipline. |
| Keywords: | Banks and banking - Japan ; Accounting |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfpb:2004-27&r=acc |
| By: | Marco Cagetti; Mariacristina De Nardi |
| Abstract: | Entrepreneurship is a key determinant of investment, saving, wealth holdings, and wealth inequality. We study the aggregate and the distributional effects of several tax reforms in a model that recognizes the key role played by the entrepreneurs, and that matches very well the extreme degree of wealth inequality observed in the U.S. data. We find that the effects of tax reforms on output and capital formation can be particularly large when they affect the majority of small and medium-size businesses, which face the most severe financial constraints, rather than a small number of big businesses. We show that the consequences of changes in the estate tax depend heavily on the size of its exemption level. The current effective estate tax system seems to insulate most of the businesses from the negative effects of estate taxation thus minimizing the aggregate costs of redistribution. Abolishing the current estate tax would generate a modest increase in wealth inequality and slightly reduce aggregate output. Decreasing progressivity of the income tax can generate large increases in output, as this stimulates entrepreneurial savings and capital formation, but at the cost of large increases in wealth concentration. |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmwp:632&r=acc |
| By: | Paul H. Kupiec (Division of Research and Statistics, Board of Governors of the Federal Reserve System) |
| Abstract: | This study assesses the state of the policy debate that surrounds the Federal regulation of margin requirements. A relatively comprehensive review of the literature finds on undisputed evidence that supports the hypothesis that margin requirements can be used to control stock return volatility and correspondingly little evidence that suggests that margin-related leverage is an important underlying source of "excess" volatility. The evidence does not support the hypothesis that there is a stable inverse relationship between the level of Regulation T margin requirements and stock returns volatility nor does it support the hypothesis that the leverage advantage in equity derivative products is a source of additional returns volatility in the stock market. |
| JEL: | G0 |
| URL: | http://d.repec.org/n?u=RePEc:fmg:fmgsps:sp0097&r=acc |
| By: | Charles W. Calomiris; Thanavut Pornrojnangkool |
| Abstract: | The merger of Fleet and BankBoston in September 1999 resulted in a regional New England lending market in which only one large, universal bank remained. We explore the extent to which that merger resulted in monopoly rents for the combined entity in some niches within the regional loan market. For small- and medium-sized middle-market borrowers, prior to the merger, Fleet and BankBoston charged unusually low loan interest rates, reflecting their ability to realize economies of scope and scale. After the merger, those cost savings were no longer passed on to medium-sized middle-market borrowers, which resulted in an increase in the average interest rate credit spreads to those borrowers of roughly one percent. Small-sized middle-market borrowers (which continued to enjoy the advantage of loan market competition from remaining small banks) maintained their low spreads. Our results suggest that it may be desirable for regulators to consider the concentration in lending markets in addition to deposit markets when evaluating mergers and structuring appropriate divestiture requirements. |
| JEL: | G21 L13 D43 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11351&r=acc |
| By: | Marco Pagano (Università di Napoli "Federico II", CSEF and CEPR) |
| Abstract: | The Modigliani-Miller (MM) theorems are a cornerstone of finance for two reasons. The first is substantive and it stems from their nature of “irrelevance propositions”: by providing a crystal-clear benchmark case where capital structure and dividend policy do not affect firm value, by implication these propositions help us understand when these decisions may affect the value of firms, and why. Indeed, the entire subsequent development of corporate finance can be described essentially as exploring the consequences of relaxing the MM assumptions. The second reason for the seminal importance of MM is methodological: by relying on an arbitrage argument, they set a precedent not only within the realm of corporate finance but also (and even more importantly) within that of asset pricing. |
| Keywords: | Modigliani-Miller theorem, capital structure, leverage, dividend policy |
| Date: | 2005–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:139&r=acc |
| By: | Daniel Levy (Bar-Ilan University) |
| Abstract: | I estimate time varying aggregate capital stock depreciation rates for the post-war U.S. economy using capital-investment evolution equation along with the data on the annual net capital stock and corresponding quarterly gross investment series. I estimate depreciation rates of consumer durable goods, producer durable goods, and nonresidential business structures. The estimation results suggest that the three depreciation rate series have been behaving very differently over time. In particular, I find that over time the implied depreciation rate of nonresidential business structures has remained stable, the implied depreciation rate of consumer durable goods has been steadily declining, while the implied depreciation rate of producer durable goods has been increasing, especially during the last 10–15 years. These findings are interpreted in terms of the changes in the composition of the aggregate nonresidential business fixed and producer durable good capital stocks. In addition, I discuss the implications of the changes introduced during the 1980s in rules and regulations governing a depreciation accounting for tax purposes, and their effect on the estimates of capital depreciation rates derived in this paper. The main argument the paper makes is that technological progress may be leading to accelerated depreciation of producer durable goods and equipment since newer and more advanced technology makes older equipment obsolete. The empirical evidence reported in this paper supports this argument. |
| Keywords: | Time Varying Depreciation Rate, Capital Stock, Consumer Durable Goods, Producer Durable Goods, Business Structures, Technological Progress |
| JEL: | E22 C82 |
| Date: | 2005–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpot:0505007&r=acc |
| By: | David Joulfaian (Government of the United States, Department of the Treasury) |
| Abstract: | Much of the literature on the effects of estate taxation on charitable bequests has relied on cross sectional data, reflecting the uniqueness of death. Few have explored longitudinal data to exploit exogenous variations in tax regimes. The latter, however, continue to be susceptible to omitted variable as well as measurement error biases attributable to changes in the treatment of spousal bequests and frequent changes in tax regimes. This paper explores the effects of the estate tax on charitable bequests using administrative data from two tax regimes where earlier biases are minimized. The deductibility of charitable bequests is found to have significant implications for giving. However, the effects of estate tax repeal are much smaller. These findings are sensitive to expectations of the tax regime in effect at time of death. |
| Keywords: | Bequests, Taxes, Charitable Giving |
| JEL: | D19 H24 H31 |
| Date: | 2005–05–14 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwppe:0505004&r=acc |
| By: | Petri Böckerman (Labour Institute for Economic Research); Eero Lehto (Labour Institute for Economic Research) |
| Abstract: | This paper explores domestic mergers and acquisitions (M&As) from the regional perspective. The Finnish firm-level evidence reveals that geographical closeness matters a lot for M&As within a single country. Thus, a great number of domestic M&As occur within narrowly defined regions. Interestingly, domestic M&As reinforce the core-periphery dimension. The results from matched firm-level data show that the strong ability by an acquiring company to monitor the target (measured by the knowledge embodied in human capital) is able to support M&As that occur across distant locations. |
| Keywords: | mergers, acquisitions, monitoring, agglomeration |
| JEL: | G34 R12 |
| Date: | 2005–05–13 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpur:0505002&r=acc |