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on Accounting and Auditing |
| By: | John M. Barrios; Brian C. Fujiy; Petro Lisowsky; Michael Minnis |
| Abstract: | We examine how differences in financial reporting practices shape firm productivity. Leveraging new audit questions in the U.S. Census Bureau's 2021 Management and Organizational Practices Survey (MOPS), and complementary tax return data from the Internal Revenue Service (IRS) and detailed financial records from Sageworks, we find that (i) variation in reporting quality explains 10-20 percent of intra-industry total factor productivity dispersion, and (ii) evidence of complementarity between the effects of financial audits and management practices driving firm productivity. We then examine the underlying mechanisms. First, audits function as a managerial technology, improving the precision of internal information and raising efficiency, with stronger effects in competitive, low-margin industries and among younger firms. Second, exploiting cross-state variation in tax incentives, we show that audits constrain underreporting and mitigate the downward bias in measured productivity. Together, these results highlight the underrated importance of financial reporting quality driving firm productivity. |
| Keywords: | Management, productivity, accounting, auditing |
| JEL: | D24 G3 L2 M2 M40 O33 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-72 |
| By: | Javier Garcia-Bernardo (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic and Department of Methodology & Statistics, Utrecht University, the Netherlands); Petr Jansky (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Gabriel Zucman (Paris School of Economics and University of California, Berkeley) |
| Abstract: | The 2017 Tax Cut and Jobs Act lowered the US corporate tax rate and introduced provisions to curb profit shifting. We combine survey data, tax data, and firm financial statements to study the evolution of the geographical allocation of US firms´ profits after the reform. Between 2017 and 2020, the share of profits booked abroad declined by 1 - 5 percentage points, in part related to repatriations of intellectual property to the US. However, the share of foreign profits booked in tax havens remained stable at around 50%. While aggregated changes in profit allocation are small, a number of firms responded strongly. |
| Keywords: | multinational corporation; corporate taxation; profit shifting; effective tax rate; country-by-country reporting; Tax Cuts and Jobs Act |
| JEL: | F23 H25 H26 H32 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2025_28 |
| By: | AUDU, Omoakele Gabriel; ADEGBOLA, OluwaFemi Solomon |
| Abstract: | This study examined the value relevance of accounting information in Nigerian firms. The study specifically examined the relationship between share price (MSP) and four accounting variables, earnings per share (EPS), dividends per share (DPS), operating cashflows (OCF) and book value per share (BVPS). To achieve the objectives of this research, an ex-post facto research design was employed in the study, secondary data was retrieved from the financial statements of 20 nonfinancial service companies listed on the Nigerian Exchange group (NGX) for a period of 11 years spanning from 2013-2023.The ordinary least squares regression method (OLS) was adopted to make the statistical decisions. The findings of the research reveal that there is a significant positive relationship between the dependent variable, share price (MSP) and some of the independent variables namely, earnings per share (EPS), dividends per share (DPS), operating cashflows (OCF). However, there was no significant relationship between share price and book value per share (BVPS). The study concludes that accounting variables namely, EPS, DPS and OCF have significant impact on the share price of Nigerian firms. The study recommends that Nigerian firms should prioritize transparent and accurate financial reporting, with a specific emphasis on earnings, dividends, and operational cash flow. |
| Keywords: | Financial Report, Value relevance, Earnings Per Share |
| JEL: | M2 M4 |
| Date: | 2025–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125905 |
| By: | Annalisa Tassi; Adrien Bussy |
| Abstract: | We investigate whether firms engage in VAT evasion at the retail stage—typically a point of weakness in VAT systems—in a high-enforcement, low-informality setting. To measure evasion, we exploit a reform of VAT rules (the reverse charge, RC) whereby retailers do not only remit taxes on their own value-added, but on that created along the entire supply chain, increasing their incentive to evade. Using German administrative firm-level VAT return data and an instrumental variable approach based on RC’s staggered introduction, we find no evidence of greater evasion under RC. Our results suggest that evasion at the retail stage might not be quantitatively important in high-enforcement and low-informality settings, implying little need to enlist consumers in tax enforcement to boost tax compliance. |
| Keywords: | Value Added Tax; VAT; Reverse Charge Mechanism; Tax Evasion; Withholding; Last- Mile Problem |
| JEL: | H21 H26 D22 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:fbk:wpaper:2025-05 |
| By: | Usama Jamal (CY Cergy Paris Université, THEMA) |
| Abstract: | Anti-tax avoidance policies aim to curb profit shifting by MNEs, yet their effects on capital costs and economic growth remain a critical question. This study examines the causal impacts of Earnings Stripping Rule (ESR)—a core anti–tax-avoidance measure adopted by more than ninety countries in the last decade—that limits profit shifting through debt channels but increases the cost of debt-financed capital. Using a large panel dataset on global MNE operations and a staggered difference-in-difference design, I compare the real activities of MNEs affected by ESR with those of unaffected groups. I find that ESR effectively reduces profit shifting and tax avoidance but also lowers investments in affected subsidiaries. MNEs offset these declines by reallocating capital and employ-ment toward unconstrained affiliates, primarily abroad. However, as the policy coverage expands across a group’s global footprint, this reallocation shifts from foreign to domes-tic units, closing the international escape margin and raising grouplevel tax liabilities. These findings suggest that international coordination is crucial for designing effective, non-distortionary anti-avoidance policies. |
| Keywords: | Tax Avoidance, Multinational Investment, Profit Shifting |
| JEL: | F23 H25 H26 H32 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ema:worpap:2025-16 |
| By: | Xincheng Qiu; Nicolo Russo |
| Abstract: | This paper examines income tax systems in over thirty countries over the past forty years using microdata from the Luxembourg Income Study. We show that income tax systems worldwide are well approximated by a two-parameter log-linear effective tax function. We provide country- and year-specific estimates and document several insights. First, higher average tax rates are associated with higher progressivity. Second, richer countries have more progressive tax systems. Third, progressivity varies by family structure, with marriage and children associated with higher progressivity. Finally, transfers play an important role in redistribution, making the overall tax-and-transfer function more progressive than the tax function. |
| JEL: | E62 H20 H30 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:lis:liswps:906 |