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on Accounting and Auditing |
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Issue of 2017‒07‒09
four papers chosen by |
| By: | Benjamin Montmartin (UniversitŽ C™te dÕAzur, France; GREDEG CNRS); Marcos Herrera (CONICET - IELDE; National University of Salta, Argentina); Nadine Massard (GAEL UMR 1215; UniversitŽ Grenoble Alpes, France) |
| Abstract: | Using a unique database containing information on the amount of R&D tax credits and regional, national and European subsidies received by firms in French NUTS3 regions over the period 2001-2011, we provide new evidence on the efficiency of R&D policies taking into account spatial dependency across regions. By estimating a spatial Durbin model with regimes and fixed effects, we show that in a context of yardstick competition between regions, national subsidies are the only instrument that displays total leverage effect. For other instruments internal and external effects balance each other resulting in insignificant total effects. Structural breaks corresponding to tax credit reforms are also revealed. |
| Keywords: | Additionality, French policy mix, R&D investment, Spatial panel, Structural break |
| JEL: | H25 O31 O38 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2017-22&r=acc |
| By: | Ana Martinis (The Croatian National Bank, Croatia); Igor Ljubaj (The Croatian National Bank, Croatia) |
| Abstract: | High corporate sector leverage has often been highlighted as one of the major impediments to economic recovery. We conduct a debt sustainability analysis for Croatian corporates based on firm-level data. The analysis shows that around one third of the corporate debt in Croatia is unsustainable, thus pointing to sizeable deleveraging needs. By relating the estimated firm-level debt overhang indicator with investment activity, we find that over-indebted firms have reduced their investment to a greater extent than those without debt overhang. This especially holds among exporters and domestically owned private companies, whose higher sensitivity to unsustainable debt probably explains why they are less debt burdened. Our paper contributes to the existing literature by showing that, in the case of Croatia, the estimated firm-level debt sustainability thresholds, unlike the aggregate thresholds, capture the asymmetrically negative effect of debt overhang on investment. The estimated size and impact of the debt overhang in Croatia warrant policy engagement that would include more efficient bankruptcy procedures, swifter balance sheet clean-up supported by specific tax treatments, enhanced restructuring of unsustainably indebted state-owned companies as well as a comprehensive policy strategy for improving business climate and competitiveness. |
| Keywords: | corporate debt, investment, debt overhang, deleveraging, crisis, Croatia |
| JEL: | D22 E22 F34 G31 |
| Date: | 2017–06 |
| URL: | http://d.repec.org/n?u=RePEc:hnb:wpaper:51&r=acc |
| By: | De-Ramon, sebastian (Bank of England); Straughan, Michael (Bank of England) |
| Abstract: | The Basel III/CRD IV reforms to the banking system following the financial crisis of 2008–09 required banks to raise significantly both the quality and quantity of capital on their balance sheets. This econometric study provides evidence of both the long and short-term implications for ongoing activity in the UK economy of a change in the aggregate proportion of bank capital funding. We find that, in response to changes in their capital funding, banks change credit spreads applied to private non-financial corporate borrowers to a greater extent than for household borrowers in the short term, but equalise these changes in the longer term. The short-term impact reflects banks’ desire to adjust their capital ratios through changes to the value of their risk-weighted assets by restricting the flow of lending to higher-risk sectors to a greater extent than to lower-risk sectors. We also find that after recent regulatory reforms banks may have modified their price-setting behaviour somewhat. We develop a vector error correction model of these effects with an innovative non-standard estimation of the short-term coefficients. Using this approach, we are able to: (i) test hypotheses about the short-term and long-term responses to changes in the aggregate mix of bank capital funding; (ii) test hypotheses about the responses of the non-financial corporate and household sectors; and (iii) enhance the accuracy of the short-term dynamics and the accuracy of the macroeconomic simulations of the effect of increasing bank capital. |
| Keywords: | Capital requirements; DSGE models; UK economy; bank competition |
| JEL: | D22 D53 E27 G21 |
| Date: | 2017–06–30 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0663&r=acc |
| By: | Arulampalam, Wiji (Department of Economics, University og Warwick); Devereux, Michael (Centre for Business Taxation, University of Oxford); Liberini, Federica (Economic Institute, ETH Zürich) |
| Abstract: | We use firm-level data to investigate the impact of taxes on the international location of targets in M&A allowing for heterogeneous responses by companies. The statutory tax rate in the target country is found to have a negative impact on the probability of an acquisition in that country. In addition, the estimated size of the effect is found to depend on whether (i) acquirer is a domestic or a multinational enterprise; (ii) the acquisition is domestic or cross-border; and (iii) the acquirer's country has a worldwide or territorial tax system |
| Keywords: | Multinational enterprises; cross-border expansion; target choice; corporation income tax; mixed logit |
| JEL: | C25 G34 H25 H32 |
| Date: | 2017–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2017_002&r=acc |