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on Accounting and Auditing |
| By: | Kox, Henk L.M. |
| Abstract: | The statistics on foreign direct investment (FDI) used to be important quantifiers of ownership-based control over foreign companies. However, during the 2008 financial crisis, IMF and OECD changed the FDI definition to obtain more information on intra-company finance activity. They did so by giving cross-border loans between affiliated subsidiaries (within the same parent firm) the same status as acquiring ownership of foreign firms. The change became effective in 2013. The paper shows that it resulted in a systematic drop of quality and consistency of FDI statistics, while causing massive double counting. It made comparison between pre- and post-2013 FDI statistics impossible. We propose a methodology to repair this historical mistake by emulating the pre-2013 FDI definition, which was based primarily on FDI assets. The paper provides a full proof-of-concept with a dataset holding bilateral FDI between 232 jurisdictions over the period 2001-2022. The dataset is strictly based on reported data; it uses no estimation or imputation. The new dataset is evaluated quantitatively by a comparison with the original source data. The paper also quantifies the dimensions and the country structure of 'phantom FDI' that resulted from current double-counting practices. |
| Keywords: | foreign direct investment (FDI); accounting framework; multinational companies; capital account; double counting; balance of payments. |
| JEL: | C18 C33 F21 F23 F3 F38 M2 |
| Date: | 2025–05–18 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:124812 |
| By: | Andres, Christian; Brochet, François; Limbach, Peter; Schumacher, Nicola |
| Abstract: | This study provides evidence on the performance and labor market trajectories of sell-side equity analysts with prior experience or education in accounting. Analysts with work experience in accounting issue both more accurate earnings per share (EPS) forecasts and more profitable sell recommendations, particularly if they possess substantial public accounting experience. This result highlights the unique value of pre-analyst experience that combines accounting and business knowledge, but also a competitive edge in focusing on bad news. Supporting this interpretation, we find that former auditors ask more accounting-related and less positively toned questions during earnings calls. They also play a significant monitoring role, as suggested by the higher quality and more conservative earnings of the firms they cover. Regarding labor market trajectories, former auditors are marginally more likely to achieve "All Star" analyst recognition and exhibit longer tenure in the profession. Overall, our findings highlight the strengths and limitations of accounting expertise in sell-side research in terms of information processing and career outcomes. |
| Keywords: | Analysts, Auditors, Information Processing, Monitoring, Labor Market |
| JEL: | G10 G14 M41 M42 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cfrwps:319067 |
| By: | Dina Pomeranz; Juan Carlos Suárez Serrato |
| Abstract: | The OECD has promoted the adoption of internationally standardized transfer pricing rules to curb profit shifting for tax avoidance by multinational firms. Bustos et al. (2023) analyzed a large reform in Chile based on these OECD standards and found that it led to a surge in tax advisory services. This paper investigates the external validity of this finding. Combining employment history data with information on countries’ strictness of transfer pricing regulations over time, we analyze the effect for four countries: Chile, Colombia, Spain, and Uruguay. Event-study difference-in-differences analysis shows that reforms led to substantial increase in transfer pricing consultants in most cases. The effect is larger when the reform is stronger and when a country has a lower level of pre-treatment transfer pricing strictness or of transfer pricing consultants. |
| JEL: | F23 H26 J21 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33736 |