Tax planning,corporate governance and equity value

Tax planning by firms is a highly significant activity. After audit fees, tax related services are the largest source of fee income for UK accounting firms. When viewed in terms of its impact, tax planning is the major source of the corporation tax gap amongst large firms (HMRC, 2010). Although traditionally tax planning has been viewed as benefiting shareholders via increased after tax earnings, more recently the underlying motivation has been questioned. Desai and Dharmapala (2006) argue that when an information asymmetry exists between managers and shareholders with respect to tax planning, it can facilitate managers acting in their own interests resulting in a negative association between tax planning and firm value. Using a sample of UK quoted firms from 2005 to 2007 and data drawn from International Accounting Standard 12 Income Taxes (IASB, 2010) Effective Tax Rate (ETR) reconciliations, this paper reports such a negative relationship. Further, the relationship is robust to the inclusion of corporate governance measures which could be expected to moderate the potential implications of a tax related shareholder–manager information asymmetry. An innovation of this paper is in using the ETR reconciliations to examine sub-categories of tax planning activities. The paper contributes to the debate of who determines, and benefits from tax planning conducted by firms. Its findings have direct policy relevance for shareholders and tax administrations in monitoring and controlling firms’ tax planning activities.     

Knowledge acquisition using psychotherapy technique for critical factors influencing construction project layout planning

The positioning of equipment on a construction site may change in different construction phases, different environments, and different types of end products, which greatly influence the decision of the site planning engineer who seeks to maximize the construction efficiency by minimizing the friction from the site layout. This study aims to acquire and analyze site planning experts' knowledge on critical factors influencing the construction layout planning using a psychotherapy technique. Through an open‐structured interview survey and cluster analysis, 125 core factors influencing the site layout plan were analyzed and categorized into a database.     

Market orientation practices among small and medium hotels (SMHS) in tourist destination island of Langkawi

The purpose of the study is to investigate the underlying components of market orientation practices and their effect on the Small and Medium Hotels (SMHs) performances on tourist destination island of Langkawi. Fifty SMHs were randomly selected from a sampling frame of a list of SMHs registered with Malaysian Tourism Board. For data collection purposes, structured questionnaires were personally delivered and collected. Rotated component matrix factor analysis of the data extracted four underlying factors that explain seventy nine point four six percent of the total variances and alpha reliability coefficient of ninety eight percent. Those components were named as customer orientation, interfunctional orientation, service orientation, and competitor orientation. One sample Kolmogorov‐Smirnov Test indicates that SMHs in Langkawi practices market orientation in their operations and businesses. However, the finding of the study showed that their performances in 1998 was lower than 1997. We believe that this outcome is due to the effect of national and regional economic downturn in 1998.     

Entrepreneurship in the tourism industry: Issues in developing countries

The tourism industry in Malaysia is one of the most important sectors in terms of its contribution to the growth of the nation. The extensive demand on the tourism industry has stimulated the emergence of many small and medium hotels, resorts, and chalets in Malaysia. According to the literature, small and medium hotels are an extension of the entrepreneurial characteristics of the owners/managers of the hotels. In Malaysia, small and medium hotel entrepreneurs (SMHEs) have not been given much attention. Looking at this gap, this study aims to provide a significant result on entrepreneurship issues in Malaysia. The main objective of this study is to examine the characteristics of small and medium hotel owners/managers and the issues and problems they confront in relation to their survivability in the industry. The result revealed that the majority of owners/managers of small and medium hotels were male, middle-aged and older, with secondary and upper level of education, and whose prior specialisations or knowledge were not related to tourism. With strong self-confidence and independent personality characteristics, the majority started to establish their businesses after the financial crisis in 1997–1998. The result also defined small scale to mean hotels with less than 50 rooms, which had been constructed with limited personal funding and bank loans. Information technology was found to be an important tool to promote their hotels, but conventional techniques such as word of mouth and signboards were still significant. The owners/managers of small and medium hotels were in agreement over their weaknesses in terms of lack of knowledge and skills in running the business. At the same time, they also felt that the government should play a more proactive role in promoting the tourism industry.     

Do political connections affect the role of independent audit committees and CEO Duality? Some evidence from Malaysian audit pricing

This study examines whether political connection to firms affects the association between audit committee independence and demand for higher quality audits. In line with Carcello et al. (2002), our findings show that there is a positive association between audit committee independence and audit fees thus supporting the hypothesis that more independent audit committees demand higher audit quality. However, we find that this relationship is weaker for politically connected (PCON) firms suggesting that the independence of audit committees in Malaysian PCON firms may be compromised. Additionally, we provide evidence that PCON firms that have CEO duality are perceived by audit firms as being of higher risk than CEO duality firms without political connection.     

Globalization and female labor force participation: The role of trading partners

This paper uses industrial level data from 21 developing and emerging economies over the period of 1995–2013, to analyze the impact of globalization, in particular, trade orientation of industries onto female employment share. The fractional probit estimation reveals that taking cumulative measures of export and import share often camouflages the impact of trade on female employment. The disintegration of export and import share according to their trading partners reveals that exports and imports from the developed world alone contribute to higher female employment. Moreover, it is the low-tech exports to developed countries and high-tech imports from developed countries which results in an increase in female employment. These findings call for the strengthening of trade ties with the developed world, especially when it comes to promoting low-tech exports and high-tech imports. Our results also reveal that the trading links with the developed world can further enhance female employment if developing country possesses a greater pool of educated female labor force.     

Foreign direct investment and its impact on real wages: evidence from Turkish micro-level data

This paper analyzes the role of foreign direct investment (FDI) on wages, using Turkish firm-level data from 2003 to 2010, a period which coincides with significant FDI inflows both in manufacturing and service sector firms in the region. We explore the possibility of increased foreign presence translating into shifts in either labor demand or supply curves thereby resulting in changing the total wage bill or wage per worker in the host country. To empirically test this relationship we employ a dynamic specification of the wage equation. After addressing endogeneity concerns, the results reveal that foreign presence measured in terms of intra- and inter-sectoral linkages is related to higher wage bills in the host economy, hence strengthening the argument for attracting greater foreign investment to enhance labor welfare.     

Conflicting Bifuzzy Multi-attribute Group Decision Making Model with Application to Flood Control Project

We propose a group decision making model based on conflicting bifuzzy sets (CBFS) where evaluation are bi-valued in accordance to the subjective assessment obtained from the experts for the positive and negative views. This paper discusses the weighting methods for particular attribute and subattribute with emphasis given to the unification of subjective and objective weights. The integration of CBFS in the model is naturally done by extending the fuzzy evaluation in parallel with the intuitionistic fuzzy. We introduce a new technique to compute the similarity measure, being the degree of agreement between the experts. We end up the paper by demonstrating the applicability of the proposed model to the empirical case of flood control project, one of the project selection problems.     

The UK New Regulatory Framework of High-Cost Short-Term Credit: Is There a Shift Towards a More “Law and Society” Based Approach?

In the wake of the 2008 financial crisis, the consumer credit market in the UK has witnessed a proliferation in the number of high-cost short-term credit (HCSTC) providers promising easy access to credit without the complications of credit history. This act of generosity came at a very high price, which on some occasions reached 4000% APR. After refusing for many years to interfere with the credit price and other aspects of the HCSTC business’ practices, the Government since 2014 started to impose certain regulatory restrictions on the sector including a cost cap, January 2015, on what HCSTC providers can charge. This article argues that the FCA’s credit cost cap and other regulatory measures taken since 2014 signify an important shift in the regulatory approach to HCSTC. It argues that the neoliberal ‘law and economics’ theoretical paradigm is no longer the foundation of the regulatory framework. Instead, the Government has shifted towards a Polanyian ‘law and society’ based approach, which is attentive to the vulnerability of HCSTC consumers and consequently more capable of protecting them. This article concludes by arguing how this newly adopted approach can be further advanced.     

Allocative and scale efficiency among maize farmers in Zambia: a zero efficiency stochastic frontier approach

The commonly used stochastic frontier model assumes that all firms are inefficient. In this specification, inefficiency is non-negative, and the probability of inefficiency being exactly zero is also zero. To the extent that efficiency varies widely across farms in under-developed economies, it is important to employ techniques that account for both inefficiency and full efficiency to ensure unbiased efficiency estimates. In this study, we employ a zero-inefficiency stochastic frontier model to examine allocative efficiency and scale economies, as well as key determinants of efficiency among Zambian maize farmers. The results show that, unlike the stochastic frontier model, the zero-inefficiency stochastic frontier model successfully allows for both fully efficient and inefficient firms to be accounted for in the estimation procedure. The estimates also reveal the presence of scale economies, with the zero-inefficiency stochastic frontier model better predicting scale efficiency compared to the stochastic frontier model. The findings also show that inefficiency is explained by the level of education, access to extension services, distance to markets and access to credit.