Conditional Mandates on Management Earnings Forecasts: The Impact on the Cost of Debt

Exploiting a unique conditional disclosure mandate on management earnings forecasts (MEFs) in China, we examine the differential effects of voluntary and mandatory MEFs on the cost of debt. We find that firms providing voluntary MEFs have lower cost of debt than do mandatory forecasters and nonforecasters. The results of the channel analyses reveal that voluntary forecasters have greater commitment to voluntary MEFs in future periods than do mandatory forecasters and nonforecasters, and the precision, accuracy, and timeliness of MEFs are higher for voluntary forecasters than for mandatory forecasters. Additional analyses show that the differential effects of voluntary and mandatory MEFs on cost of debt are stronger for voluntary forecasters operating in opaque information environments, issuing high-quality and confirming forecasts, controlled by private shareholders, and operating in highly competitive product markets. Overall, our results indicate that, compared with mandatory MEFs, voluntary MEFs are more informative for credit investors, particularly for firms facing greater information risk and operating uncertainty.     

Endogenous network efficiency,macroeconomy, and competition: Evidence from the Portuguese banking industry

Although performance analysis has become a vital part of the banking industry, research on the efficiency of Portuguese banking remains scarce and focused on discussing rankings to the detriment of unveiling its productive structure relative to its competition. This issue is of utmost importance considering the relevant transformations in the Portuguese economy over the last ten years. In this study, we developed a network productive structure comprising two paradigms (the production and intermediation approaches, respectively) to assess how market competition and other macro-economic variables impact bank efficiency and their feedback effects in Portugal. Unlike previous research, an integrated multi-layer perceptron (MLP)/hidden Markov model (HMM) was used for the first time to unveil endogeneity among banking competition, macro-economic variables, and the efficiency levels of the production and intermediation approaches in banking. The findings illustrate the pattern of interaction among these variables and verify that the production efficiency is the cornerstone of endogeneity in Portuguese banks. Policy makers will find the results helpful.     

税收优惠政策与高技术产业创新效率

研究目标：分析税收优惠政策对创新效率的影响以及创新效率的收敛性，测度税收优惠政策对创新带来的实际贡献。研究方法：构建随机前沿模型测度高技术产业的创新效率，采用σ收敛和β收敛检验方法检验创新效率收敛性，并采用反事实计量方法测度税收优惠政策对创新带来的实际贡献。研究发现：税收优惠政策对研发效率有显著正影响，对市场转化效率的影响为正但不显著，政策实施后效率分布也更集中；研发效率的收敛主要是由东中西地区内部之间差距的缩小造成的，而市场转化效率的收敛是由三大地区内部差距的缩小以及中西部和东部地区的差距缩小共同造成的；税收优惠政策使研发效率大约上升了8%～10%，带来的创新产出占总产出的比重也一直维持在10%以上。研究创新：从效率水平和收敛性两个角度来定量分析税收优惠政策对创新效率的影响。研究价值：为更好地采取措施提高创新效率和减小地区创新效率差距提供经验证据。     

Viewpoint: Soda taxes – Four questions economists need to address

The popularity of soda taxes as a public health policy has grown rapidly in the last few years. While the evidence that the tax works in reducing the purchases of soda is emerging, there are a number of questions that are yet to be answered before the broader effectiveness of this measure can be determined. Beyond health effects, there is more specifically a need to better understand the economic mechanisms of change, redistributive effects, as well as causal and spillover effects in food systems and economy more broadly.     

Competitive experience and gender difference in risk preference,trust preference and academic performance: Evidence from Gaokao in China

This study examines whether and how competitive experience affects gender difference in the preferences for risk and trust as well as academic performance. By utilizing the provincial differences in college admission rates as an indicator of competitive experience for students, we assess its relationship with gender difference in risk preference, trust preference, and academic performance. We find that females from provinces with lower college admission rates are more risk averse and less trustful, and perform better in more competitive environment, compared with their male counterparts. Our study suggests that observed gender differences may partially reflect the effects of schooling environment rather than inherent gender traits.     

Organizational Design,Competition, and Financial Exchanges

We investigate the incentives for vertical and horizontal integration in the financial securities service industry. In a model with two exchanges and two central securities depositories (CSDs), we find that decentralized decisions might lead to privately and socially inferior industry equilibria with vertical integration of both CSDs with their respective exchanges. Allowing for horizontal integration of CSDs avoids privately inferior industry equilibria. However, we observe too little horizontal integration from the social perspective. We link our results to recent regulatory and institutional developments such as the emergence of multilateral trading facilities, over-the-counter regulation, and financial harmonization.     

Effects of investor tax heterogeneity on stock prices and trading behaviour around the ex-dividend day: the case of Australia

Using a sample of Australian stocks during the 1996–2014 period, this study examines how tax heterogeneity between domestic and foreign investors affects trading behaviour and stock prices around the ex-dividend day. Domestic investors prefer dividends and tend to buy stocks cum-dividend and sell them ex-dividend whereas foreign investors tend to trade in the opposite direction. Abnormal trading turnover increases with tax heterogeneity. Moreover, stocks with a larger domestic investor base are associated with a higher price drop-off ratio on the ex-dividend day and higher market value of franking credits. Overall, our findings support the dynamic dividend clientele hypothesis.     

Competition and stability in the credit industry: Banking vs. factoring industries

Over the last decade, most credit-industries registered a decline in lending volumes, while factoring industries instead registered a substantial growth in terms of turnover. Surprisingly, only a handful of papers so far investigate factoring companies. Do factoring firms display the same stability levels of banks? Is the competition similar in factoring and banking industries? Is the relationship between competition and stability the same in these industries? Focusing on Italy (one of the largest factoring and banking markets in Europe) and using a unique dataset, we show three main results: factoring companies are (on average) more stable than banks; 2) the stability of factoring companies increase when competition declines (competition-fragility view); 3) the competition-fragility view is weaker in the factoring industry than in the banking industry. Our findings indicate that competition in the Italian credit industry was greater in factoring than in banking.     

Agency costs and tax planning when the government is a major Shareholder

In state owned enterprises (SOEs), taxes are a dividend to the controlling shareholder, the state, but a cost to other shareholders. We examine publicly traded firms in China and find significantly lower tax avoidance by SOEs relative to non-SOEs. The differences are pronounced for locally versus centrally-owned SOEs and during the year of SOE term performance evaluations. We link our results to managerial incentives through promotion tests, finding that higher SOE tax rates are associated with higher promotion frequencies of SOE managers. Our results suggest managerial incentives and tax reporting are conditional on the ownership structure of the firm.     

Conditions influencing the adoption of a soda tax for public health: Analysis of the French case (2005–2012)

Although over 40 jurisdictions have adopted a tax on sugar-sweetened beverages (SSBs) for public health worldwide, it is still debated in many places. Policy processes can influence the prospect of an SSB tax, its design and its public health benefits. To get an insight into such processes, we undertook a case study of the soda tax enacted in France on the 1^st of January 2012. Newspaper articles (2003–2013) and institutional documents (2007–2012) were identified using keywords and search engines. Qualitative data extraction and analyses were performed on a thematic and chronological basis, with guidance from Kingdon’s multiple streams theory (MST). Triangulation was enhanced by using complementary sources. This study shows that in August 2011, the French government surprisingly announced a €3.58 cent/L excise tax on SSBs, excluding juices with no added sugars and non-calorically sweetened beverages (NCSBs). As part of a large budgetary plan, the proposal aimed to reduce SSB consumption and raise revenue that was earmarked for health care. Several conditions contributed to opening a policy window: The announcement occurred in the context of severe budgetary deficits; soda tax scenarios had already been discussed at a high level; and the bill was supported by convinced political leaders. Subsequently, the tax successfully passed through the legislative process due to a series of unexpected events, but its public health rationale and design were weakened. The first event was the disorganised reaction by the food industry, despite their sharp opposition to the tax. The next event was the support of the soda tax that came from a majority of Deputies, provided that the revenues would serve another purpose: relieving wage costs in the farming sector. Finally, policy entrepreneurs favoured a compromise to make the tax politically acceptable and legally viable: The tax rate doubled, the scope was extended to NCSBs and revenues were split between health care and agriculture. This study sheds light on influence factors that could be taken into account by public health actors willing to influence soda tax policy processes.