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on Accounting and Auditing |
| By: | Shiqi Fang; Zexun Chen; Jake Ansell |
| Abstract: | This paper introduces a novel framework, "peer-induced fairness", to scientifically audit algorithmic fairness. It addresses a critical but often overlooked issue: distinguishing between adverse outcomes due to algorithmic discrimination and those resulting from individuals' insufficient capabilities. By utilizing counterfactual fairness and advanced causal inference techniques, such as the Single World Intervention Graph, this model-agnostic approach evaluates fairness at the individual level through peer comparisons and hypothesis testing. It also tackles challenges like data scarcity and imbalance, offering a flexible, plug-and-play self-audit tool for stakeholders and an external audit tool for regulators, while providing explainable feedback for those affected by unfavorable decisions. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2408.02558 |
| By: | David Hirshleifer; Liang Ma |
| Abstract: | We test and compare the effects of introduction of two new financial information technologies, EDGAR and XBRL, on well-known asset pricing anomalies often attributed to mispricing. EDGAR facilitates easier access to public accounting information about public firms; XBRL reduces the cost of processing such information. Using stacked difference-in-differences regressions, we find that both EDGAR and XBRL reduce mispricing for accounting-based anomalies but not for non-accounting-based anomalies. The economic magnitudes of the effects on accounting-based anomalies are similar for EDGAR and XBRL. These results suggest that both easier access to and less costly processing of public information enhance market efficiency. |
| JEL: | G12 G14 G4 G40 M40 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32767 |
| By: | Ana Maria Santacreu; Ashley Stewart |
| Abstract: | This paper investigates the impact of the 2017 Tax Cuts and Jobs Act (TCJA) on U.S. multinationals’ intangibles. We develop a theoretical model that incorporates key provisions of the TCJA—the Global Intangible Low-Taxed Income (GILTI) and the Foreign-Derived Intangible Income (FDII)—and derive testable implications for changes in licensing and patent transfer patterns. Using data on international royalty flows and patent assignments, we test the model’s predictions. Our findings suggest that the TCJA may have impacted profit shifting strategies through intangibles, aligning with our model’s predictions. |
| Keywords: | profit-shifting; intangibles; patents; taxation |
| JEL: | F12 O33 O41 O47 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedlwp:98710 |
| By: | Damiani, Genaro Martín |
| Abstract: | This paper provides new theoretical insights into the causes and consequences of indirect tax evasion. I propose a decision-making framework that contemplates biased perceptions of apprehension probabilities, which are affected by the environment where the agents operate. This microfounded formulation allows for the analysis of how taxation affects tax evasion (and vice versa) in the aggregate, emphasizing the existing relationships between the relative size of the shadow economy, tax rates, and government revenue. It is shown that a traditional Laffer curve (inversely U-shaped and with a unique maximum) can only exist under certain conditions. The maximum government revenue attainable turns out to be, in any case, lower than in the absence of tax evasion. Nevertheless, evasion control policies are proven to be always effective in increasing government revenue. |
| Keywords: | Indirect tax evasion; Law and Economics; Biased perceptions |
| JEL: | D80 H26 K42 |
| Date: | 2024–08–21 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121779 |
| By: | Plamen Nikolov; Wouter Simons; Alessandro Turrini; Peter Voigt |
| Abstract: | This paper uncovers patterns of TFP growth in the EU compared with the US using the latest vintage of the EU-KLEMS database which accounts better for intangible capital in production. Both in the EU and the US the growth contribution of TFP has been declining over the past two decades, while that of intangible capital and labour composition has been growing since the Global Financial Crisis (GFC) recovery. Most TFP growth can be attributed to a relatively few industries. The TFP growth advantage of the US over the EU is linked both to higher TFP growth rates in the sectors generating large TFP gains and to larger shares in value added for these sectors. Over the 2013-2019 period, in both the EU and the US, TFP growth is mostly due to TFP growth in services. While in the EU several so-called mid-tech manufacturing sectors, provided a positive contribution to overall TFP growth, in the US the only manufacturing sector that did so is not mid-tech: manufacturing of computers and electronics. Despite an acceleration of intangible capital investment in the EU, dynamics remain slower as compared with those observed in the US. Econometric estimations show that the elasticity of TFP to intangible capital has dropped considerably since the post GFC recovery, suggesting a possible slowdown of technological diffusion. Overall, even though sectors which are expanding their share in value added in the EU are generally those exhibiting higher and accelerating TFP growth, it appears that in the EU the transition towards the services sectors, where TFP is growing the fastest, is slower compared with the US. |
| JEL: | D24 E22 O40 O52 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:208 |