nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2013‒06‒24
seven papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Sales Tax Collections in Nonmetropolitan Communities By Brorsen, B. Wade; Lansford, Notie H.
  2. VAT Rate Effect on Price Setting Behaviour in Latvia: Evidence from CPI Micro Data By Konstantins Benkovskis; Ludmila Fadejeva
  3. Optimal Capital Taxation in A Neoclassical Growth Model By Chia-Hui Lu; Been-Lon Chen
  4. Lessons from 15 Years of Experience with the Dutch Tax Allowance for Energy Investments for Firms By Arjan Ruijs; Herman R.J. Vollebergh
  5. To the Problem of Financial Safety Estimation: the Index of Financial Safety of Turkey By Matkovskyy, Roman
  6. Collateral registries for movable assets : does their introduction spur firms'access to bank finance ? By Love, Inessa; Peria, Maria Soledad Martinez; Singh, Sandeep
  7. Decentralisation and Economic Growth - Part 2: The Impact on Economic Activity, Productivity and Investment By Hansjörg Blöchliger; Balázs Égert

  1. By: Brorsen, B. Wade; Lansford, Notie H.
    Abstract: Small communities sometimes increase their local sales tax rate in order to maintain or expand public services. The question addressed here is what is the net effect of changing sales tax rates on revenues from sales taxes? Using both semiparametric and nonparametric regression, we find retail sales to be mostly unaffected by sales tax rates as long as the rate is less than four percent. At rates higher than four percent, however, there is a severe reduction in sales, yet not enough that sales tax revenues would decrease with increased rates. For a penny increase in sales tax rates from four cents, a city can expect their revenues to go up 0.86 cents according to the semiparametric model and 0.74 cents according to the parametric model.
    Keywords: rural development, sales tax, semiparametric estimation, nonmetropolitan, Community/Rural/Urban Development, Public Economics, H2, R51,
    Date: 2013
  2. By: Konstantins Benkovskis; Ludmila Fadejeva
    Abstract: This paper evaluates the inflation effect of recent VAT rate changes in Latvia by using CPI micro data. Our findings suggest that the pass-through of the tax rate to consumer prices is strong in case of upward tax adjustments, especially when there are no demand restrictions, while the pass-through is weaker for tax reductions. The frequency of price changes peaks at the moment of VAT adjustment, which, however, is partially compensated by lower average size of price revisions. The level of pass-through exhibits a high degree of heterogeneity with higher pass-through for goods, especially food, and lower for services.
    Keywords: VAT, inflation, sample selection model, CPI micro data, Latvia
    JEL: C24 D40 E31 H20
    Date: 2013–06–11
  3. By: Chia-Hui Lu (Department of Economics, National Taipei University); Been-Lon Chen (Institute of Economics, Academia Sinica, Taipei, Taiwan)
    Abstract: This paper studies the optimal factor tax incidence in a neoclassical growth model with a given share of government expenditure in output. In the Ramsey planner’s optimization, the effect of next period’s capital on government expenditure equals the given share of the marginal product of capital. Capital accumulation reduces the discounted net marginal product of next period’s capital by way of increasing government expenditure. In order to internalize the distortion, it is optimal to tax capital income in the long run.
    Keywords: Optimal factor taxation, efficiency
    JEL: D83 E62 H21 J64
    Date: 2013–05
  4. By: Arjan Ruijs; Herman R.J. Vollebergh
    Abstract: Since 1997, the Netherlands has had a tax allowance scheme that was introduced to promote investments in energy-saving technologies and sustainable energy production. This so-called Energy Investment Tax Allowance (EIA in Dutch) reduces up-front investment costs for firms investing in the newest energy-saving and sustainable energy technologies. The basic design of the EIA has remained the same over the past 15 years. Firms investing in technologies listed in the annually updated ‘Energy List’ may deduct some of the investment costs from their taxable profits in the year of the investment. Compared to investments in conventional reference technologies, the EIA decreases the payback period and reduces the need of financing the investments in energy-saving technologies. The EIA may also reduce search costs made by investors to find particular technologies, because entry on the Energy List equals eligibility for the subsidy. The Energy List contains generic technologies that meet a certain energy-saving standard or a selection of novel, but proven, technologies with a higher energy-saving potential than conventional technologies. Therefore, the list itself is also likely to have an attention value that may contribute to reduce information failures in the market for technology adoption. Over the past 15 years, the EIA has been affected by a number of changes, mainly due to exogenous factors, such as interactions with other policy instruments, rising oil and gas prices, and the economic crisis since 2007. Despite this turbulence and changes in government focus, the EIA remains part of the Dutch energy policy mix. Its flexibility allowed for adaptations where necessary and its role as a subsidy for technology adoption is likely to also have contributed to its legitimacy.<BR>Depuis 1997, les Pays-Bas ont en vigueur un mécanisme de déduction fiscale qui a été adopté pour encourager les investissements dans les technologies d’économie d’énergie et dans la production durable d’énergie. Appelé Energy Investment Tax Allowance (déduction fiscale au titre des investissements énergétiques, EIA en néerlandais), ce dispositif permet de réduire la mise de fonds initiale des entreprises qui investissent dans les technologies les plus récentes d’économie d’énergie ou de l’énergie durable. Le principe fondamental de l’EIA est resté le même pendant les 15 dernières années : les entreprises qui investissent dans les technologies inscrites dans la Liste des technologies de l’énergie – l’‘Energy List’ –, mise à jour tous les ans, peuvent déduire une partie de leurs coûts d’investissement de leurs bénéfices imposables de l’année où l’investissement est effectué. Grâce à l’EIA, les investissements dans les technologies d’économie d’énergie ont un temps de retour et des besoins de financement inférieurs à ceux des investissements dans des technologies conventionnelles de référence. L’EIA permet aussi aux investisseurs d’alléger les dépenses à engager pour trouver telle ou telle technologie, car l’inscription dans la Liste des technologies de l’énergie ouvre droit au subventionnement. Dans cette liste figurent des technologies génériques qui respectent une norme d’économie d’énergie donnée ainsi qu’une sélection de technologies nouvelles, mais éprouvées, dont le potentiel d’économie d’énergie est supérieur à celui des technologies conventionnelles. La liste proprement dite a donc une valeur informative dès lors qu’elle peut contribuer à combler des lacunes d’information sur le marché des technologies. Au cours des 15 dernières années, l’EIA a fait l’objet de plusieurs modifications, découlant surtout de facteurs exogènes tels que des interactions avec d’autres instruments d’action, la hausse des prix du pétrole et du gaz, ou la crise économique depuis 2007. Malgré cette instabilité et les changements de priorités des pouvoirs publics, l’EIA continue de faire partie de l’arsenal de mesures de politique énergétique des Pays-Bas. Sa souplesse a permis les adaptations nécessaires, et son rôle de subvention à l’adoption de technologies a sans doute aussi contribué à sa légitimité.
    Keywords: investment, environment, tax, tax preference, policy evaluation, investissement, environnement, taxe, avantage fiscal, évaluation des politiques
    JEL: H23 H25 H32 O33 Q48
    Date: 2013–04–19
  5. By: Matkovskyy, Roman
    Abstract: This paper proposes an approach to explore the strength of the financial system of Turkey against the possibility of financial disturbances appearing based on the construction of the Index of Financial Safety (IFS) of a country. For this purpose the macro-prudential approach, system analyses, the basic principles of the theory of logical inference, principal of parsimony, principal component analysis are used. The results showed that the IFS applied to Turkey is able to capture the main perturbations in its financial system.
    Keywords: Financial safety, index of financial safety (IFS), financial risks
    JEL: C38 E50 G01 G17
    Date: 2013
  6. By: Love, Inessa; Peria, Maria Soledad Martinez; Singh, Sandeep
    Abstract: Using firm-level surveys for up to 73 countries, this paper explores the impact of introducing collateral registries for movable assets on firms'access to bank finance. It compares firms'access to bank finance in seven countries that introduced collateral registries for movable assets against three control groups: firms in all countries that did not introduce a registry, firms in a sample of countries matched by location and income per capita to the countries that introduced registries for movable assets, and firms in countries that undertook other types of collateral reforms but did not set up registries for movable assets. Overall, the analysis finds that introducing collateral registries for movable assets increases firms'access to bank finance. There is also some evidence that this effect is larger among smaller firms.
    Keywords: Access to Finance,Debt Markets,Bankruptcy and Resolution of Financial Distress,Banks&Banking Reform,Emerging Markets
    Date: 2013–06–01
  7. By: Hansjörg Blöchliger; Balázs Égert
    Abstract: This paper analyses the relationship between fiscal decentralisation and economic activity. Like other institutional arrangements, fiscal decentralisation affects firms, households and public entities, and the way they save, invest, spend or innovate. This in turn may have considerable consequences for the long-term growth potential of a country. Based on a set of growth regressions, the results suggest that the relationship between fiscal decentralisation and GDP per capita, productivity or human capital is positive and statistically significant, while the relationship with investment is insignificant. Doubling the sub-central tax or spending share (e.g. moving from a decentralisation ratio of 15 to 30%) is associated with an increase of GDP per capita by 3% on average. Revenue-based decentralisation indicators (e.g. decentralisation of tax revenue or tax autonomy) deliver results both statistically and economically (larger coefficients) more significant than spending-based indicators. The results vary little between federal and unitary countries in general. Intergovernmental transfers tend to be negatively associated with GDP per capita. Finally, the relationship between decentralisation and GDP per capita is non-linear, with results suggesting that returns to decentralisation are decreasing.<P>Décentralisation et croissance économique : Partie 2 : Impact sur l'activité économique, la productivité et l'investissement<BR>La présente note analyse la relation entre la décentralisation budgétaire et l’activité économique. À l’instar d’autres modalités institutionnelles, la décentralisation influe sur les entreprises, les ménages et les entités publiques, ainsi que sur la manière dont ils économisent, investissent, dépensent ou innovent. Cela peut à son tour avoir des conséquences considérables sur le potentiel de croissance à long terme d’un pays. S’appuyant sur une série de régressions de croissance, les résultats conduisent à penser que la relation entre la décentralisation budgétaire et le PIB par habitant, la productivité ou le capital humain est statistiquement significative, alors que la relation avec l’investissement ne l’est pas. La multiplication par deux de la part des impôts ou des dépenses relevant des administrations infranationales (le ratio de décentralisation passant ainsi de 15 à 30 %, par exemple) est associée à une hausse du PIB par habitant de 3 % en moyenne. Les indicateurs de décentralisation fondés sur les recettes (par exemple la décentralisation des recettes fiscales ou l’autonomie fiscale) offrent des résultats plus significatifs statistiquement et économiquement (coefficients plus élevés) que les indicateurs basés sur les dépenses. Les résultats ne varient guère entre les pays à régime fédéral et les autres pays d’une manière générale. Les transferts intergouvernementaux se corrèlent généralement de manière négative avec le PIB par habitant. Enfin, la relation entre la décentralisation et le PIB par habitant n’est pas linéaire, les résultats conduisant à penser que le rendement de la décentralisation est en recul.
    Keywords: economic growth, productivity, fiscal decentralisation, fiscal federalism, croissance économique, productivité, fédéralisme budgétaire, décentralisation budgétaire
    JEL: H70 H77 O43
    Date: 2013–06–03

This nep-acc issue is ©2013 by Alexander Harin. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.