Optimal Tax Deductions for Net Losses Under Private Insurance With an Upper Limit

Kaplow (1992b) shows that governments should not provide a tax deduction for net losses when a private insurance contract is available. However, his findings rest on the assumption that the private insurance is proportional coverage. We find that Kaplow's conclusions may not hold when the private insurance contract contains an upper limit. The findings of our article show that Kaplow's conclusions are sensitive to the assumption that the insurance contract is available in the private market.     

Insurer's insolvency risk and tax deductions for the individual's net losses

Using the representative agent approach as in Kaplow (Am Econ Rev 82:1013–1017, 1992b), this paper shows that providing tax deductions for the individual’s net losses is socially optimal when the insurer faces the risk of insolvency. We further show that the government should adopt a higher tax deduction rate for net losses when the insurer is insolvent than when the insurer is solvent. Thus, tax deductions for net losses could be used to provide an insurance for individuals against the insurer’s risk of insolvency. These findings could also be used to explain why a government provides supplementary public insurance or government relief. Finally, we discuss that, if the individuals are heterogeneous in terms of loss severity, loss probability, or income level, providing a tax deduction for the individual’s net losses may not always achieve a Pareto improvement, and cross subsidization should be taken into consideration.

Colliding Worlds: Issues Relating to Language Translation in Accounting and Some Lessons from Other Disciplines

This paper explores the implications of language translation in accounting. It draws on research on translation in other disciplines, and on insights from applied linguistics. It examines practical problems and solutions explored in other disciplines that we deem relevant to accounting. The paper also examines the ideological, cultural, legal, and political consequences of translation. We find that the ambiguity inherent in translation is, on the one hand, relevant for the translation of accounting principles and can contribute to accounting convergence. We show, on the other hand, that it has the potential to be exploited in ideologically or pragmatically motivated distortions in the implementation of accounting regulation. We further argue that the importance of translation in accounting is underestimated or disregarded, inter alia because it has limited effect on the culturally and economically most dominant stakeholders. We finally examine the implications of translation problems for less powerful stakeholders and smaller language communities.     

Cash transfers and high food prices: Explaining outcomes on Ethiopia’s Productive Safety Net Programme

An ongoing and highly politicised debate concerns the relative efficacy of cash transfers versus food aid. This paper aims to shed light on this debate, drawing on new empirical evidence from Ethiopia’s Productive Safety Net Programme (PSNP). Our data derive from a two-wave panel survey conducted in 2006 and 2008. Ethiopia has experienced unprecedented rates of inflation since 2007, which have reduced the real purchasing power of PSNP cash payments. Our regression findings confirm that food transfers or ‘cash plus food’ packages are superior to cash transfers alone – they enable higher levels of income growth, livestock accumulation and self-reported food security. These results raise questions of fundamental importance to global humanitarian response and social protection policy. We draw out some implications for the design of social transfer programmes and describe some steps that could be taken to enable ‘predictable transfers to meet predictable needs’.     

Navigating the internationalization process: Strategic resources for early internationalizing firms

Journal of International Entrepreneurship - Despite an increasing number of studies identifying factors that influence the internationalization process for early internationalizing firms (EIFs), it...     

An inspector calls: farm accommodation providers' attitudes to quality assurance schemes in the county of Devon

Estimates suggest that 10 000 farms in the UK offer bed and breakfast (B and B) serviced accommodation. A thorough review of the existing literature indicates over 50% of Devon and Cornwall's farmhouse B and B sector operate without participating in any form of quality assurance inspection scheme. This research executes a stratified postal survey to gain a comprehensive understanding of Devon's farmhouse B and B product, with particular interest in extracting providers' attitudes towards quality assurance inspection schemes. The very representative results suggest a divergence of attitudes towards the notion of quality inspections for all farmhouse B and B providers. Copyright © 2002 John Wiley & Sons, Ltd.     

CEO performance-based grants’ vesting provisions and debt contracts: Evidence from GAAP,Non-GAAP and KPI metrics

We examine the influence of CEOs’ equity and cash grants’ vesting provisions that are based on (i) accounting performance metrics prepared under US generally accepted principles (GAAP), (ii) non-GAAP performance metrics and (iii) key performance indicators (KPIs) on debt contracts. We find that grants with vesting provisions based on GAAP metrics and KPIs lead to a lower cost of debt, a lower likelihood of collateral requirements and less restrictive covenant terms. In contrast, performance-based grants with non-GAAP vesting provisions lead to a higher cost of debt, a higher likelihood of collateral requirements and more restrictive covenant terms. Supplementary analyses reveal that our results are incremental to other debtholder-friendly features in the CEO contracts, such as grants with debt-related performance measures and CEOs’ inside debt holdings, and robust to alternative variable definitions and specifications. Overall, our results suggest that debtholders understand the differing incentives associated with GAAP, non-GAAP and KPI-based performance measures, and incorporate these differences into debt contracts.     

Using trust-based philanthropy with community-based organizations during the COVID-19 pandemic

Community-based organizations (CBOs) fill a critical role in acting as public health partners and trusted resources for their communities, especially in an emergency. The CDC Foundation, an independent, nonprofit organization, used trust-based philanthropy to manage more than 110 COVID-19 grants focused on equitable vaccine information, outreach, and access. The CDC Foundation team uses a trust-based philanthropy paradigm by applying five out of six of the grantmaking practices: do the homework; simplify and streamline paperwork; be transparent and responsive; solicit and act on feedback; and offer support beyond the check. By applying trust-based philanthropy practices, the CDC Foundation is empowering CBOs through flexible grant management and more equitable power dynamics as grantee and grantor. This has been essential to CBOs in their efforts of tackling health inequities during the COVID-19 pandemic and improving community resilience. Lessons learned will inform future collaborations with CBOs where the power dynamics are shared.     

Connecting nature with luxury service

Many service and retail facilities, such as hotels, restaurants, hospitals, and airports, are incorporating nature elements into their building design. Individuals' affinity for nature is called biophilia. The literature on biophilic design heavily focuses on the restorative effects of biophilic design on the facility users, leaving many other effects under-investigated. In particular, biophilic design implementation requires significant financial investment, thus, whether biophilic design can bring financial returns from consumers would be of interest to practitioners. This study investigates whether biophilic design attributes are linked to consumers’ willingness to pay a price premium (WTPP). Two pretests show that when biophilic attributes are moderately implemented, they can elevate aesthetic and attractiveness perceptions, but this effect tapers off if the implementation is excessive. Through three between-subjects main experiments, this study confirms that WTPP is enhanced via increased aesthetic value and luxury perceptions when biophilic attributes are present (vs. absent—Studies 1 and 2), but this serial mediation is moderated by biophilic scarcity (low vs. high—Study 3). An adequate level of nature elements, when implemented in biophilic-scarce areas, can improve customers' perceptions of aesthetic value and luxury. This, in turn, improves customers' WTPP for the service.