nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2016‒12‒04
five papers chosen by

  1. Is the American Public Corporation in Trouble? By Kathleen Kahle; René M. Stulz
  2. Capital Structure and Corporate Performance in Late Imperial Russia By Amanda Gregg; Steven Nafziger
  3. Housing and Macroeconomics: Evidence from Property Tax Shocks By Thomas GRJEBINE; Francois Geerolf
  4. Is it the "How" or the "When" that Matters in Fiscal Adjustments? By Alberto Alesina; Gualtiero Azzalini; Carlo Favero; Francesco Giavazzi; Armando Miano
  5. Ireland: Financial Sector Assessment Program; Technical Note-Banking Supervision and Update on the Assessment of Observance of the Basel Core Principles By International Monetary Fund. Monetary and Capital Markets Department

  1. By: Kathleen Kahle; René M. Stulz
    Abstract: We examine the current state of the American public corporation and how it has evolved over the last forty years. There are fewer public corporations now than forty years ago, but they are much older and larger. They invest differently, as the importance of R&D investments has grown relative to capital expenditures. On average, public firms have record high cash holdings and in most recent years they have more cash than long-term debt. They are less profitable than they used to be and profits are more concentrated, as the top 100 firms now account for most of the net income of American public firms. Accounting statements are less informative about the performance and the value of firms because firms increasingly invest in intangible assets that do not appear on their balance sheets. Firms’ total payouts to shareholders as a percent of net income are at record levels, suggesting that firms either lack opportunities to invest or have poor incentives to invest. The credit crisis appears to leave few traces on the course of American public corporations.
    JEL: D22 G24 G30
    Date: 2016–11
  2. By: Amanda Gregg (Middlebury College); Steven Nafziger (Williams College)
    Abstract: We investigate the financing of corporations in industrialization’s early stages. A new balance sheet database featuring all Imperial Russian corporations in 1914 suggests that Russian corporations exhibited considerable financial flexibility. We emphasize financing differences between two types of Russian corporations: share partnerships and A-corporations. Share partnerships issued greater dividends as a proportion of share capital or profits, were less likely to issue bonds, and had larger accounts payable. Financial strategies varied with age, size, and sector in a manner consistent with modern corporate finance theories. This optimistic assessment suggests that absence of low-cost incorporation impeded Russian industrial and economic development.
    Date: 2016–08
  3. By: Thomas GRJEBINE (Cepii); Francois Geerolf (University of California, Los Angeles)
    Abstract: We use variations in property taxes in a panel of more than 20 countries, and over 40 years, to investigate one source of joint determination between house prices and output, employment, consumer spending, investment and the trade balance. We use a narrative approach to identify changes in property taxes that are automatic or politically motivated, and thus exogenous to the business cycle. We also use the easiness with which property tax increases can be passed on to renters depending on landlord-tenants regulations across countries as a source of overidentification. In preliminary results, we find large non-ricardian effects. Property tax increases are highly contractionary and the economic effect is large, with a multiplier strictly higher than one. Regressions of housing on macroeconomic aggregates, plagued by the omission of the joint effect of property taxes, would suggest a marginal propensity to consume out of housing wealth of about 9 cents, and a marginal propensity to invest out of housing collateral of 6 cents. These results are in line with various micro or macroeconomic studies. We try to discuss these results through the lens of macroeconomic theory.
    Date: 2016
  4. By: Alberto Alesina; Gualtiero Azzalini; Carlo Favero; Francesco Giavazzi; Armando Miano
    Abstract: Using data from 16 OECD countries from 1981 to 2014 we find that the composition of fiscal adjustments is much more important than the state of the cycle in determining their effects on output. Adjustments based upon spending cuts are much less costly than those based upon tax increases regardless of whether they start in a recession or not. Our results appear not to be systematically explained by different reactions of monetary policy. However, when the domestic central bank can set interest rates -- that is outside of a currency union -- it appears to be able to dampen the recessionary effects of tax-based consolidations implemented during a recession. This finding could help understand the recessionary effects of European "austerity, which was mostly tax based and implemented within a currency union.
    JEL: H60 H62
    Date: 2016–11
  5. By: International Monetary Fund. Monetary and Capital Markets Department
    Abstract: This Technical Note discusses the findings and recommendations made in the Financial Sector Assessment Program for Ireland in the areas of banking supervision and observance of the Basel core principles. The effective operational implementation of the Single Supervisory Mechanism (SSM) is well established in Ireland, and all authorities are actively engaged and committed to the new supervisory framework led by the European Central Bank. The SSM has further strengthened the prudential regulation and supervision of banks since the time of the 2013 assessment. The transition to the operational implementation of the SSM has not resulted in major gaps in banking supervision, but some transitional challenges remain.
    Keywords: Financial Sector Assessment Program;Basel Core Principles;Banking sector;Credit risk;Bank supervision;Reports on the Observance of Standards and Codes;Ireland;
    Date: 2016–09–29

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NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.