Profit shifting and tax-rate uncertainty

Using firm-level data for 1,084 parent firms in 24 countries and for 9,497 subsidiaries in 54 countries, we show that tax-motivated profit shifting is larger among subsidiaries in countries that have stable corporate tax rates over time. Our findings further suggest that firms move away from transfer pricing and toward intragroup debt shifting that has lower adjustment costs. Our results are robust to several identification methods and respecifications, and they highlight the important role of tax-rate uncertainty in the profit-shifting decision while pointing to an adjustment away from more costly transfer pricing and toward debt shifting.     

Consumer Trends and Attitudes to Functional Foods

Abstract

Consumers' needs have grown to such an extent that they are sought out of nutritious and pleasant organoleptic foods, as well as functional foods. This study explores consumer attitudes towards health nutrition products and particularly functional foods, using data from a survey to 325 consumers. The results designate that consumers recognize different kinds of functional foods, willing to pay a premium for their purchase. They perceive that functional foods may contribute to easily follow a healthy and balanced diet and reduce the risk of health problems but appeared anxious about the health benefits these foods communicate in their labelling.     

Systemic risk,real GDP growth,and sentiment

Review of Quantitative Finance and Accounting - Using a mixed frequency VAR methodology, which can accommodate variables with different frequencies in a VAR framework, we model the relation between...     

Sustainability reporting,materiality, and accountability assessment in the airport industry

Air travel is, nowadays, recognized as being one of the most popular modes of transport. Air transport is among the most significant contributors to the world gross domestic product and is accountable for a great environmental and social impact. Driven by the well‐established sustainability discourse and the vital role businesses can play in disseminating the sustainable development concept, this paper attempted to map airport industry's most material operational aspects and assess airport operators' accountability level on disclosing corporate information regarding airports' economic, environmental, and social performance. In this context, 33 reports and 903 material issues representing 193 international airports were reviewed and assessed, and a methodology for benchmarking the accountability level of best reporting airport operators was developed, showcasing materiality assessment as a useful management tool for strengthening airport operators' business strategy and enhancing their corporate performance. The paper indicated that (a) customer focus (i.e., health, safety and satisfaction), economic viability, and business continuity and preparedness are operational aspects of high materiality and (b) the disclosure level, especially concerning specific performance indicators, is still moderate. In conclusion, this study has shown that materiality assessment gains ground as a management tool among airports' management teams and the completeness of Sustainability reports is positively correlated with the “level” of adherence as described by the Global Reporting Initiative.     

Liquidity commonality in order-driven trading: evidence from the Athens Stock Exchange

We examine the presence of liquidity commonality in the order-driven Athens Stock Exchange (ASE). Unlike the majority of liquidity commonality studies that focus on the bid–ask spread, our analysis extends deeper in the Limit Order Book, providing insight on the price impact of both small and large trades. We utilize a 6-month FTSE/ATHEX-20 intraday data set to estimate the liquidity factor model of Chordia et al. (2000). To this end, we conduct single-equation analysis as well as panel data analysis with the use of two-way clustered errors, correcting for simultaneous firm and time correlations. Moreover, we apply standard principal component analysis on stock liquidities to extract the marketwide liquidity component. We find that liquidity commonality is low at the bid–ask spread, whereas it increases deeper in the book; consequently, large traders face liquidity risks associated with both individual stock and marketwide illiquidity. Moreover, our empirical evidence hints that liquidity commonality is asynchronous, suggesting that the ASE trading process includes various levels of information speed. Our analysis contributes to the understanding of liquidity commonality in order-driven trading, especially in emerging markets like the ASE where trading activity is limited and information speed is low.     

Social Media in Union Communications: An International Study with UNI Global Union Affiliates

This article assesses the use of social media in union communications based on an international survey with 149 unions affiliated with UNI Global Union. High expectations of union modernization, leadership and pressures from members are likely to drive the agenda of social media within unions. However, the actual use of different channels is based on organizational variables such as membership base and participation in communities of practice. Beliefs about the anticipated benefits and risks of social media were not found to be influential in these early assessments. Implications for union communication strategies are discussed.     

The Innovation Value Chain in New Technology‐Based Firms: Evidence from the U.K.

Innovation is central to the survival and growth of firms, and ultimately to the health of the economies of which they are part. A clear understanding both of the processes by which firms perform innovation and the benefits which flow from innovation in terms of productivity and growth is therefore essential. This paper demonstrates the use of a conceptual framework and modeling tool, the innovation value chain (IVC), and shows how the IVC approach helps to highlight strengths and weaknesses in the innovation performance of a key group of firms—new technology‐based firms. The value of the IVC is demonstrated in showing the key interrelationships in the whole process of innovation from sourcing knowledge through product and process innovation to performance in terms of the growth and productivity outcomes of different types of innovation. The use of the IVC highlights key complementarities, such as that between internal R&D, external R&D, and other external sources of knowledge. Other important relationships are also highlighted. Skill resources matter throughout the IVC, being positively associated with external knowledge linkages and innovation success, and also having a direct influence on growth independent of the effect on innovation. A key benefit of the IVC approach is therefore its ability to highlight the roles of different factors at various stages of the knowledge–innovation–performance nexus, and to show their indirect as well as direct impact. This in turn permits both managerial and policy implications to be drawn.     

Does the Stock Market Compensate Banks for Diversifying into the Insurance Business?

This paper explores a wide range of corporate restructurings, all available deals from wire services, in the banking and insurance sectors that led to bancassurance ventures. An event study methodology is employed to calculate excess returns on and around the deals’ announcement date. Using both univariate and multivariate analysis the paper finds bank driven mergers, deal's size and regional categorization all triggering positive and significant market reactions. Unlike the univariate framework, multivariate analysis shows that geographic focus and language are not significant factors. The results also indicate that markets are indifferent with respect to bank withdrawals from the bank‐insurance operations. Finally, Canadian, U.S. and European bank‐insurance deals produce positive results, while Australasian bidders offer statistically insignificant equity returns.     

Corporate social responsibility: attributions,loyalty, and the mediating role of trust

This study investigates whether consumers’ perceptions of motives influence their evaluation of corporate social responsibility (CSR) efforts. The study reveals the mediating role of consumer trust in CSR evaluation frameworks; managers should monitor consumer trust, which seems to be an important subprocess regulating the effect of consumer attributions on patronage and recommendation intentions. Further, managers may allay the negative effects of profit-motivated giving by doing well on service quality perceptions. On the other hand, appropriately motivated giving continues to positively affect trust regardless of the performance of the firm on service quality provision.     

Budget impact model in moderate-to-severe psoriasis vulgaris assessing effects of calcipotriene and betamethasone dipropionate foam on per-patient standard of care costs

Aims: To develop a budget impact model (BIM) for estimating the financial impact of formulary adoption and uptake of calcipotriene and betamethasone dipropionate (C/BD) foam (0.005%/0.064%) on the costs of biologics for treating moderate-to-severe psoriasis vulgaris in a hypothetical US healthcare plan with 1 million members.

Methods: This BIM incorporated epidemiologic data, market uptake assumptions, and drug utilization costs, simulating the treatment mix for patients who are candidates for biologics before (Scenario #1) and after (Scenario #2) the introduction of C/BD foam. Predicted outcomes were expressed in terms of the annual cost of treatment (COT) and the COT per member per month (PMPM).

Results: At year 1, C/BD foam had the lowest per-patient cost ($9,913) necessary to achieve a Psoriasis Area and Severity Index (PASI)-75 response compared with etanercept ($73,773), adalimumab ($92,871), infliximab ($34,048), ustekinumab ($83,975), secukinumab ($113,858), apremilast ($47,960), and ixekizumab ($62,707). Following addition of C/BD foam to the formulary, the annual COT for moderate-to-severe psoriasis would decrease by $36,112,572 (17.91%, from $201,621,219 to $165,508,647). The COT PMPM is expected to decrease by $3.00 (17.86%, from $16.80 to $13.80).

Limitations: Drug costs were based on Medi-Span reference pricing (January 21, 2016); differences in treatment costs for drug administration, laboratory monitoring, or adverse events were not accounted for. Potentially confounding were the definition of “moderate-to-severe” and the heterogeneous efficacy data. The per-patient cost for PASI-75 response at year 1 was estimated from short-term efficacy data for C/BD foam and apremilast only.

Conclusions: The introduction of C/BD foam is expected to decrease the annual COT for moderate-to-severe psoriasis treatable with biologics by $36,112,572 for a hypothetical US healthcare plan with 1 million plan members, and to lower the COT PMPM by $3.00.