nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2016‒07‒30
six papers chosen by
Alexander Harin
Modern University for the Humanities

  1. Adjusting the external adjustment: cyclical factors and the Italian current account By Silvia Fabiani; Stefano Federico; Alberto Felettigh
  2. Turkiye’de Tuketici ve Ticari Kredilerin Cari Acikla Iliskisi By Zeynel Harun Aliogullari; Yusuf Soner Baskaya; Yunus Emrah Bulut; Mustafa Kilinc
  3. Financial (Dis-)information : evidence from a multi-country audit study By Gine,Xavier; Mazer,Rafael Keenan
  4. On the measurement of investment types: Heterogeneity in corporate tax elasticities By Jungmann, Hendrik; Loretz, Simon
  5. Optimal Nonlinear Taxation: The Dual Approach By Aart Gerritsen
  6. Bank Capital Regulations Around the World : What Explains the Differences? By Kara, Gazi

  1. By: Silvia Fabiani (Bank of Italy); Stefano Federico (Bank of Italy); Alberto Felettigh (Bank of Italy)
    Abstract: We investigate the role of cyclical factors in the adjustment of Italy’s external balance from 2010, developing a model that infers the potential levels of domestic demand and of imports and exports from an exogenous measure of potential output, in an internally coherent fashion and also taking composition effects into account. According to our results, in 2015 Italy’s cyclically-adjusted current account surplus came to about 0.5 percentage points of GDP; the overall external rebalancing of the Italian economy has largely been of a non-cyclical nature, with a positive contribution from the decline in the prices of energy commodities. By applying our methodology to the other major euro-area countries, we find that current account imbalances over the recent period are amplified when assessed in cyclically-adjusted terms.
    Keywords: current account, business fluctuations, macroeconomic imbalances, output gap
    JEL: F32 F40
    Date: 2016–07
  2. By: Zeynel Harun Aliogullari; Yusuf Soner Baskaya; Yunus Emrah Bulut; Mustafa Kilinc
    Abstract: [TR] Bu calismada, Turkiye’deki tuketici ve ticari kredi buyumelerinin cari acikla iliskisi incelenmistir. 2003C2-2015C2 donemini kapsayan veriyle yapilan regresyon sonuclari, Turkiye’de tuketici kredisi buyumesinin ilgili donemde cari dengeyi istatistiki olarak anlamli ve olumsuz yonde etkiledigini, ticari kredi buyumesinin ise cari denge uzerinde istatistiki olarak anlamli bir etkisinin bulunmadigini gostermektedir. Sonuclar, TCMB’nin temel hedefi olan fiyat istikrarini surdurmek yaninda finansal istikrari da gozeten yeni para politikasi cercevesinin ve finansal istikrarin saglanmasiyla sorumlu diger kuruluslarin aldigi makroihtiyati tedbirlerin Turkiye’de finansal istikrari destekleyici yonde calistigini gostermektedir. [EN] In this paper, the relationship between consumer and commercial loan growths and current account deficit in Turkey is investigated. The regression results using 2003Q2-2015Q2 period reveal that in Turkey consumer loan growth negatively and statistically significantly affects current account balance, while commercial loan growth has no statistically significant effect on current account balance. The results indicate that the new monetary policy framework of CBRT which takes into account the financial stability while keeping the price stability as the primary objective and the macroprudential measures taken by other related agencies work to enhance the financial stability in Turkey.
    Date: 2015
  3. By: Gine,Xavier; Mazer,Rafael Keenan
    Abstract: An audit study was conducted in Ghana, Mexico and Peru to understand the quality of financial information and products offered to low-income customers. Trained auditors visited multiple financial institutions, seeking credit and savings products. Consistent with Gabaix and Laibson (2006), staff only provides information about the cost when asked, disclosing less than a third of the total cost voluntarily. In fact, the cost disclosed voluntarily is uncorrelated with the expensiveness of the product. In addition, clients are rarely offered the cheapest product, most likely because staff is incentivized to offer more expensive and thus more profitable products to the institution. This suggests that clients are not provided enough information to be able to compare among products, and that disclosure and transparency policies may be ineffective because they undermine the commercial interest of financial institutions.
    Date: 2016–07–19
  4. By: Jungmann, Hendrik (University of Salzburg); Loretz, Simon (Institute for Advanced Studies, Vienna)
    Abstract: This paper highlights the importance of different investment motives and to what extend they affect the responsiveness to corporate taxation. In particular, we discuss how to classify investment as non-related, horizontal, vertical and complex types using a combination of both firm-specific (ownership) information and sector-specific information from input-output tables. Hereby, we point out to what extend the resulting classification depends on assumptions made by the researcher. Following this, we examine the effects of host-country corporate taxation on the volume of investment within related firms (i.e., the intensive margin). We are able to quantitatively replicate the average result in the empirical literature with an overall tax semi-elasticity of approximately -1.5. Taking into account firm-heterogeneity we find that non-related investments react stronger to corporate taxation whereas horizontal investments are less responsive, though, significant negative tax semi-elasticities turn out for the subset of manufacturing industries where horizontal investment is much more prevalent. As the strict categorical classification still yields ambiguous results for both vertical and complex investments we extend the methodology by defining shares of investment and make the point that, by and large, stronger business motives reduce the tax responsiveness of investment.
    Keywords: Corporate Taxation; Investment Strategy; Panel Econometrics
    JEL: C23 F23 H25 L25
    Date: 2016–04–15
  5. By: Aart Gerritsen
    Abstract: The usual method of solving for an optimal nonlinear tax schedule is that of the primal approach – ï¬ rst solving for the optimal allocation, and subsequently determining which tax system decentralizes this allocation. While this method is mathematically rigorous, it lacks intuitive appeal. I propose a different method based on the dual approach – directly solving for the optimal tax system – which is equally rigorous, while being much closer in spirit to actual tax policy. I show that this approach can easily incorporate preference heterogeneity, as well as individual behavior that is not fully consistent with utility maximization. Over and above solving for the optimum, the dual approach allows one to obtain new insights into the welfare effects of small nonlinear tax reforms outside the optimum.
    Keywords: Optimal taxation, dual approach, preference heterogeneity, individual misoptimization, tax reforms
    JEL: H21 H23 H24
    Date: 2016–01
  6. By: Kara, Gazi
    Abstract: Despite the extensive attention that the Basel capital adequacy standards have received internationally, significant variation exists in the implementation of these standards across countries. Furthermore, a significant number of countries increase or decrease the stringency of capital regulations over time. The paper investigates the empirical determinants of the variation in the data based on the theories of bank capital regulation. The results show that countries with high average returns to investment and a high ratio of government ownership of banks choose less stringent capital regulation standards. Capital regulations may also be less stringent in countries with more concentrated banking sectors.
    Keywords: Capital Requirements ; Basel Capital Accord ; Financial regulation ; International policy coordination
    JEL: G21 G28 F33
    Date: 2016–07

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