nep-acc New Economics Papers
on Accounting and Auditing
Issue of 2018‒12‒10
ten papers chosen by

  1. Companies’ Characteristics and the Choice of Hedge Accounting for Derivatives Reporting: Evidence from Malaysian Listed Companies By Abdullah, Azrul; Ku Ismail, Ku Nor Izah
  2. Net Direct Taxes and Double Taxation Avoidance By Kinga Rozalia STOICA-GRAMA
  3. A DSGE Model to Evaluate the Macroeconomic Impacts of Taxation By José Alves
  4. Factor Incomes in Global Value Chains: The Role of Intangibles By Wen Chen; Bart Los; Marcel P. Timmer
  5. Financial liberalisation, financial development and financial crises in SADC countries By Clement Moyo; Pierre Le Roux
  6. Ganz oder gar nicht - wer nutzte die Quotenkonsolidierung? Eine Analyse der Ausübung des Bilanzierungswahlrechts unter IAS 31 im Prime Standard der deutschen Börse By Wolf, Robin
  7. Fiscal equalization and the tax structure By Holm-Hadulla, Fédéric
  8. Credit supply and demand in unconventional times By Altavilla, Carlo; Boucinha, Miguel; Holton, Sarah; Ongena, Steven
  9. Debt Overhang, Rollover Risk, and Corporate Investment: Evidence from the European Crisis By Kalemli-Ozcan, Sebnem
  10. The Risk-Taking Channel of Monetary Policy in Macedonia: Evidence from Credit Registry Data By Mite Miteski; Ana Mitreska; Mihajlo Vaskov

  1. By: Abdullah, Azrul; Ku Ismail, Ku Nor Izah
    Abstract: This paper investigates the adoption of hedge accounting by Malaysian listed companies in reporting their use of derivatives for hedging activities. Based on a sample of 300 Malaysian listed companies, we found that only 162 companies (54 percent) used derivatives to hedge their financial risks exposure and only 30 percent of the companies chose to apply hedge accounting. In addition, this study examines the relationship between the company specific characteristics and their application of hedge accounting. The logistic regression results showed that the decision to apply hedge accounting by Malaysian companies is positively influenced by the company size and leverage. The implications of the findings were discussed.
    Keywords: Derivatives; Financial instruments; Hedge Accounting; Company Specific Characteristics
    JEL: M21 M41 M48
    Date: 2017–06–09
  2. By: Kinga Rozalia STOICA-GRAMA (Faculty of Financial Management (Student), Ecological University of Bucharest)
    Abstract: Double taxation can only arise in the case of direct taxes: taxes on income and wealth taxes, and adversely affect the international capital movement, the exchange of persons, goods, capital services and impedes the development of economic relations between countries. Given that the double taxation is a global problem that increases the fiscal pressure and diminishes the investment attractiveness, and it becomes necessary to improve the domestic tax system, we intend to analyze the imposition of revenues, by emphasizing the necessity, the measures and the methods undertaken to eliminate the double taxation. To this end, the analysis between two countries: of Romania and France has been carried out and we find that the application of the methods of avoiding double international taxation has contrary effects on the state of residence compared to the consequences of the company in question because the tax relief is advantageous for the company but constitutes a disadvantage for the granting State; but it is fundamental to choose a method because the amount of tax revenue, is maximum in the absence of a tax convention between the two signatory states. By international agreement, taxpayers are guaranteed that their income will not be subject to double taxation and are protected against fiscal discrimination in the Contracting State in which they operate.
    Keywords: double taxation, fiscal pressure, tax relief, methods of avoiding double taxation, tax conventions
    JEL: H21 H26 H73
    Date: 2018–04
  3. By: José Alves
    Abstract: As recognized, taxation is not only an instrument for government to collect revenues from the economic agents but also an instrument of fiscal policy to influence the agents’ behaviour. In this work, we develop a DSGE model to assess the macroeconomic impact of three tax items (taxes on individual income, on firms’ income and on consumption) on the dynamics of both individual tax items and on the aggregate revenues as well. Moreover, we also intend to evaluate how macroeconomic aggregates behave in a presence of stochastic shocks in taxation.
    Keywords: DSGE models; Tax effects; Fiscal Policy; Optimal taxation
    JEL: D58 E62 H21 H30
    Date: 2018–11
  4. By: Wen Chen; Bart Los; Marcel P. Timmer
    Abstract: Recent studies document a decline in the share of labour and a simultaneous increase in the share of residual (‘factorless’) income in national GDP. We argue the need for study of factor incomes in cross-border production to complement country studies. We define a GVC production function that tracks the value added in each stage of production in any country-industry. We define a new residual as the difference between the value of the final good and the payments to all tangibles (capital and labour) in any stage. We focus on GVCs of manufactured goods and find the residual to be large. We interpret it as income for intangibles that are (mostly) not covered in current national accounts statistics. We document decreasing labour and increasing capital income shares over the period 2000-14. This is mainly due to increasing income for intangible assets, in particular in GVCs of durable goods. We provide evidence that suggests that the 2000s should be seen as an exceptional period in the global economy during which multinational firms benefitted from reduced labour costs through offshoring, while capitalising on existing firm-specific intangibles, such as brand names, at little marginal cost.
    JEL: E01 E22
    Date: 2018–11
  5. By: Clement Moyo (Department of Economics, Nelson Mandela University); Pierre Le Roux (Department of Economics, Nelson Mandela University)
    Abstract: The issue of financial reforms and financial development has received considerable attention over the recent past. A number of recent studies conclude that financial development may hinder economic growth. Therefore, to shed light on this negative relationship, this study investigates whether financial liberalisation and financial development increase the likelihood financial crises in SADC countries. The logit model is employed for the analysis using data for the period 1990 to 2015. The results showed that financial liberalisation captured by real interest rates and capital account openness reduces the likelihood of financial crises. On the other hand, financial development represented by bank credit, increases the incidence of financial crises. Therefore, financial liberalisation may increase the likelihood of financial crises indirectly through financial development. The study recommends that a sound regulatory and supervisory framework be established as well as institutional quality raised to curb the effect of financial development on the incidence of financial crises.
    Keywords: Financial liberalisation, financial crises, financial development, logit model.
    JEL: C23 E60 G01 G21 G28
    Date: 2018–11
  6. By: Wolf, Robin
    Abstract: Vor Einführung von IFRS 11 besaßen Unternehmen ein Wahlrecht, ob sie ihr Gemeinschaftsunternehmen nach IAS 31 unter Anwendung der Quotenkonsolidierung oder der at-Equity Bilanzierung in ihrem Konzernabschluss abbilden wollten. Hinsichtlich beider Alternativen besteht ein seit langem geführter Methodendiskurs. Die weitere Erforschung im Kontext der IFRS-Änderungen erfordert ein genaues Verständnis der Beweggründe dieser Wahlrechtsausübung. Die Ergebnisse der vorliegenden Untersuchung für Unternehmen des deutsche Prime Standards deuten insbesondere auf die Relevanz der strategischen Heterogenität zwischen den Kooperationspartnern sowie der historischen Anwendung der US-GAAP durch die bilanzierenden Unternehmen als Faktoren für die Wahl der at-Equity Bilanzierung hin. Vorhandene Befragungen deutscher Unternehmen bestätigend und bestehende Unterschiede zu empirische Studien anderer europäischer Kapitalmärkte kritisch analysierend, leistet das Arbeitspapier Vorarbeit für die weitere Forschung.
    Keywords: Gemeinschaftsunternehmen,joint venture,IAS 31,IFRS 11,at-equity Bilanzierung,Quotenkonsolidierung,Bilanzierungswahlrecht,equity method,proportionate consoldidation,accounting choice
    Date: 2018
  7. By: Holm-Hadulla, Fédéric
    Abstract: Sub-national governments often finance substantial parts of their budgets via taxes on capital or other mobile factors – despite having access to alternative, less distortionary, revenue sources. This paper develops three hypotheses to explain this pattern and tests them in a natural experiment from Germany. The first hypothesis is that fiscal redistribution between jurisdictions lowers the perceived excess burden of distortionary taxation and thereby raises its attractiveness from the perspective of local governments; the second is that a desire for redistribution within jurisdictions induces a shift away from less distortionary tax instruments, despite their superior efficiency properties; the third is that distortionary taxation serves as a Pigouvian intervention to correct externalities. The empirical analysis supports redistribution between jurisdictions as important, but insufficient, to fully explain the observed reliance on distortionary taxation. Among the remaining two hypotheses, the data favour Pigouvian over distributional motives as a further rationale for the local taxation of mobile factors. JEL Classification: H23, H25, H71, H77
    Keywords: difference-in-difference, federalism, fiscal equalization, natural experiment, tax structure
    Date: 2018–11
  8. By: Altavilla, Carlo; Boucinha, Miguel; Holton, Sarah; Ongena, Steven
    Abstract: Do borrowers demand less credit from banks with weak balance sheet positions? To answer this question we use novel bank-specific survey data matched with confidential balance sheet information on a large set of euro area banks. We find that, following a conventional monetary policy shock, bank balance sheet strength influences not only credit supply but also credit demand. The resilience of lenders plays an important role for firms when selecting whom to borrow from. We also assess the impact on credit origination of unconventional monetary policies using survey responses on the exposure of individual banks to quantitative easing and negative interest rate policies. We find that both policies do stimulate loan supply even after fully controlling for bank-specific demand, borrower quality, and balance sheet strength. JEL Classification: E51, G21
    Keywords: balance sheet strength, bank lending survey, credit demand and supply, non-standard monetary policy
    Date: 2018–11
  9. By: Kalemli-Ozcan, Sebnem
    Abstract: We quantify the role of financial factors behind the sluggish post-crisis performance of European firms. We use a firm-bank-sovereign matched database to identify separate roles for firm and bank balance sheet weaknesses arising from changes in sovereign risk and aggregate demand conditions. We find that firms with higher debt levels and a higher share of short-term debt reduce their investment more after the crisis. This negative effect is stronger for firms linked to weak banks with exposures to sovereign risk, signifying increased rollover risk. These financial channels explain about 60% of the decline in aggregate corporate investment.
    Keywords: Bank-Sovereign Nexus; debt maturity; Firm Investment; Rollover Risk
    JEL: E0 F0
    Date: 2018–11
  10. By: Mite Miteski (National Bank of Republic of Macedonia); Ana Mitreska (National Bank of Republic of Macedonia); Mihajlo Vaskov (National Bank of Republic of Macedonia)
    Abstract: The last global crisis brought the monetary policy risk-taking channel to the fore, arguing that lingering low interest rates might affect not only the quantity, but the quality of credit extended as well. In line with this debate, this paper is the first effort to empirically investigate the potential existence of the monetary policy risk-taking channel in Macedonia. For this purpose we use a rather unique database of corporate loans, taken from the Credit Registry of the National Bank of the Republic of Macedonia (NBRM), which is complemented with data from banks’ balance sheets. By using pooled OLS on semi-annual data for the 2010-2017 period, our study points to an inverse relationship between the policy rate and the ex-ante risk rating assigned by the banks, a finding that is supportive to the existence of the risk-taking channel, although the effect is relatively small. The results prove to be robust after controlling for several bank, loan and time specific variables. We also test for possible difference in the risk-taking by banks conditioned on the capitalization level, but the results do not confirm difference in the reaction. The findings of the study are policy-relevant, as they confirm the need for policy makers to be mindful on financial stability impact when making monetary decisions.
    Keywords: Monetary policy, risk taking, ex-ante credit risk, leverage, POLS
    JEL: E43 E44 E52 G21
    Date: 2018

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