Is it U.S. GAAP or IFRS? Understanding how R&D costs affect ratio analysis

While financial reporting standards under U.S. GAAP and IFRS are fundamentally similar, differences do exist that may affect our analysis of company financial statements. This is particularly true when comparing a U.S. company following U.S. GAAP to a firm that uses IFRS. To illustrate, we compare research and development (R&D) accounting methods under both sets of standards and illustrate how they affect the analysis of financial results of firms in a specific industry—automotive manufacturers. Our results provide insight into settings in which differences in R&D accounting may have the greatest impact on financial analysis.     

Natural resource rents and internal conflicts: Can decentralization lift the curse?

We study how natural resource rents affect the risk of internal conflict within countries and how the federal structure of countries influences this relationship. Natural resource abundance may induce excessive rent-seeking and thus increase the risk of internal conflict. Fiscal and political decentralization as an institutional arrangement for rent-sharing and political codetermination of regions within a country may limit the destructive effect of natural resource rents on internal stability. Using cross-country and panel data from more than 90 countries covering the period 1984–2004, we find evidence that natural resource rents indeed increase the risk of internal conflict, but this relationship is significantly mitigated by political decentralization.     

U.S. food aid and American exports to recipient countries during the Cold War

In this article, we test to what extent the food aid granted by the U.S. during the Cold War was strategically motivated and used to promote U.S. interests. Using the data for the period 1971–1990, we investigate whether U.S. wheat aid had an effect on recipient countries’ total import of American products. The evidence we provide suggests a positive and robust relationship and thus it is consistent with the argument that U.S. food aid helped to create larger markets for U.S. producers.     

Foreign aid preferences and perceptions in donor countries

We present original survey data on preferences for foreign aid in 24 donor countries from 2005 to 2008. On publicly-funded foreign aid (Official Development Assistance, or ODA), we find patterns that are consistent with a standard model of democratic policy formation, in which donations are treated as a pure public good. Controlling for perceptions of current ODA, we show that individual preferences for ODA are (i) negatively correlated with relative income within a country-year; and (ii) positively correlated with inequality at the country level. We extend the analysis to explain variation in the gap between desired aid and actual ODA, arguing that lobbying by high-income special interest groups can divert resources away from the median voter’s preferred level of aid. Consistent with this, we observe that ODA is significantly lower where policymakers are more susceptible to lobbying. Finally, we present a novel test of competing “crowding out” hypotheses. Self-reported private aid donations are negatively correlated with actual ODA, and positively correlated with perceived ODA. This finding is consistent with an emerging argument in the literature, whereby ODA crowds out private aid by enabling charities to forego fundraising activities and crowds in private aid through a signaling channel.     

Fiscal rules to tame the political budget cycle: Evidence from Italian municipalities

The paper provides evidence that fiscal rules can limit the political budget cycle. It uses data on Italian municipalities during the 2000s and shows that: 1) municipalities are subject to political budget cycles in capital spending; 2) the Italian sub-national fiscal rule (Domestic Stability Pact, DSP) introduced in 1999 has been enforced by the central government; 3) municipalities subject to the fiscal rule show more limited political budget cycles than municipalities not subject to the rule. In order to identify the effect, we rely on the fact that the domestic fiscal rule does not apply to municipalities below 5000 inhabitants. We find that the political budget cycle increases real capital spending by about 10–20 percent on average in the years prior to municipal elections and that municipalities subject to the DSP show a pre-electoral increase in capital spending which is only a quarter of the one of municipalities not subject to the rule.     

The end of the flat tax experiment in Slovakia: An evaluation using behavioural microsimulation in a dynamic macroeconomic framework

The paper introduces a new way of linking microsimulation models with dynamic general equilibrium frameworks to obtain an evaluation of the impact of detailed tax and benefit measures on the aggregate economy. In the approach presented in this paper, income heterogeneity interacts with the macro-economy via aggregated individual labour supply decisions which influence, and are influenced by, the dynamic evolution of the real wage rate. The method involves a reduced-form representation of the information flow between the macroeconomic and microeconomic blocks. The practical usefulness of the approach is demonstrated by evaluating actual and hypothetical tax reforms that involve abandoning the flat tax system in Slovakia. A hypothetical move to a highly progressive tax structure is shown to generate some employment gains but is associated with a drop in aggregate income and tax revenue.     

The effect of a tax training program on tax compliance and business outcomes of starting entrepreneurs: Evidence from a field experiment

This paper estimates the long-term impact of a short, partly personalized, mandatory tax training program on tax compliance and business outcomes of first-time entrepreneurs. To this end, we combine survey data, audit data and unique register data from the Netherlands' Tax and Customs Administration with a three year long randomized experiment. The results show that the training affects specific domains of tax compliant behavior. Moreover, it has no impact on business survival, but treated entrepreneurs have significantly higher profits compared to the control group due to lower business costs. These outcomes are partially supportive of our hypotheses developed from theories on tax compliance and mental accounting.     

Gender Matters in Hospitality (invited paper for ‘luminaries’ special issue of International Journal of Hospitality Management)

This article is a review paper, which examines the place of gender in hospitality research and education and discusses the significance of hospitality for women's employment and entrepreneurship opportunities. The paper’s main purpose, however, is to speculate on the future of hospitality gender research and women’s employment prospects in the industry. It suggests that, despite the emergence of gender perspectives in hospitality research and the recent rise of popular feminism in response to high-profile sexual harassment cases and a well-publicised gender pay gap, gender still does not occupy mainstream territory in the field. The paper stresses the continued missed opportunities of neglecting female talent and calls on female and male leaders to shape a gender-just future in hospitality study and practice by mentoring and holding hierarchies to account. The paper identifies AI and robotics and sexual exploitation and harassment as two areas in which hospitality gender scholars could lead scholarship and policy debates on gendered human experiences.     

Models of static and dynamic technical efficiency of municipal libraries in the Czech Republic

This article deals with the modelling of the static and dynamic technical efficiency under conditions of municipal libraries of municipalities with 1000–5000 inhabitants. The aim of this article is to determine the level of the technical efficiency and the factors that influence the results of modelling of the static and dynamic technical efficiency of 34 selected municipal libraries for the years of 2011 and 2015. The first model tests the technical efficiency of conventional services of public libraries. The second model tests the technical efficiency of municipal libraries’ operation. The third model tests the technical efficiency of the key revenues and expenditures. The results in the static models estimate the average technical efficiency of municipal libraries in the interval (0.691–0.759) for the input-oriented models, and in the interval (1.413–2.005) for the output-oriented models. In the dynamic models, the majority of municipal libraries in 2015 showed lower technical efficiency and productivity in comparison with the year of 2011. The factors influencing the level of efficiency and its course include the inputs and the outputs, and their combinations within individual models.