Diversity and intensity of information and communication technologies use and product innovation: evidence from Chilean micro-data

This study uses data from two waves of the Encuesta Longitudinal de Empresas (ELE) to examine the relationship between information and communication technologies (ICT) use and product innovation in Chilean firms. Our findings sustain the hypothesis that ICT act as enablers of innovation. However, the impacts of ICT on product innovation depend on the type of application considered. In particular, we find positive and significant association between production-integrating ICT, i.e. administrative and industry-specific software, and product innovation, while this is not the case for market-oriented ICT such as e-commerce or client relationship manager software. Finally, the results show that not every ICT combination is beneficial for innovation: firms that show a basic use of ICT are not associated with a better likelihood of introducing innovation, while firms with an advanced use of ICT are those with the more likelihood of innovating.     

Capital structure of SMEs in Spanish regions

This article examines whether the capital structure of small and medium-sized enterprises (SMEs) and its firm-factor determinants are different across regions belonging to a single country. This subject is relatively innovative in capital structure research, since the majority of the studies carried out in a single country have neglected to take into account the region in which firms operate to explain leverage. To this end, we study whether the capital structure and its firm-factor determinants—size, asset structure, profit, growth, and age—differ depending on the region in which the SMEs are located. For the empirical analysis, panel data methods are applied to a sample of firms from all regions of Spain for the period 2004–2007. Our results not only suggest that there are regional differences in the SMEs capital structure but also confirm that the impact of firm-factor determinants on leverage differs across regions in terms of signs, magnitudes and significance levels.     

Regression-based algorithms for life insurance contracts with surrender guarantees

We present a general framework for pricing life insurance contracts embedding a surrender option. The model allows for several sources of risk, such as uncertainty in mortality, interest rates and other financial factors. We describe and compare two numerical schemes based on the Least Squares Monte Carlo method, emphasizing underlying modeling assumptions and computational issues.     

Government regulation, corruption, and FDI

We analyze favors as utilization of informal modes of exchange within a formal economy, relating their negative aspects to corruption. This exercise enables us to integrate them into a model linking national institutional factors to the magnitude of cross-country FDI flows. In our empirical tests of FDI inflows in 55 countries across four distinct time periods, we find that the level of economic regulation is a major determinant of the extent of FDI inflows as well as the level of corruption, but corruption does not have an independent influence on levels of FDI inflows. Our results have important policy implications regarding the role of the state in influencing the location decisions of MNEs.     

Effluent taxes,market structure,and the rate and direction of endogenous technological change

This paper studies the effects of effluent taxes on firms’ allocation of resources to cost-reducing and emission-reducing R&D, and on entrepreneurs’ decisions to develop new goods and enter the market. A tax set at an exogenous rate that does not depend on the state of technology reduces growth, the level of consumption of each good, and raises the number of firms. The induced increase in the variety of goods is a benefit not considered in previous analyses. In terms of environmental benefits, the tax induces a positive rate of pollution abatement that offsets the “dirty” side of economic growth. A tax set at an endogenous rate that holds constant the tax burden per unit of output, in contrast, has ambiguous effects on growth, the scale of activity of each firm and the number of firms. Besides being novel, the potential positive growth effect of this type of effluent tax is precisely what makes this instrument effective for welfare-maximizing purposes. The socially optimal policy, in fact, requires the tax burden per unit of output to equal the marginal rate of substitution between the growth rate of consumption and abatement. Moreover, a tax/subsidy on entry is needed, depending on whether the contribution of product variety to pollution dominates consumers’ love of variety.      

Insurance fraud detection: A statistically validated network approach

Fraud is a social phenomenon, and fraudsters often collaborate with other fraudsters, taking on different roles. The challenge for insurance companies is to implement claim assessment and improve fraud detection accuracy. We developed an investigative system based on bipartite networks, highlighting the relationships between subjects and accidents or vehicles and accidents. We formalize filtering rules through probability models and test specific methods to assess the existence of communities in extensive networks and propose new alert metrics for suspicious structures. We apply the methodology to a real database—the Italian Antifraud Integrated Archive—and compare the results to out-of-sample fraud scams under investigation by the judicial authorities.     

Regulating the banking sector to support credit access: Evidence from small business

This study investigated the effectiveness of regulatory interventions in mitigating the harmful effects of financial crises on small firms. We examine the impact of a support factor implemented by European policymakers on Italian micro-, small-, and medium-sized enterprises (MSMEs) between 2007 and 2017. The analysis uses a difference-in-differences approach to assess the credit conditions of these firms. Contrary to expectations, our results show that MSMEs in Italy continue to face credit constraints even after the introduction of the support factor. In contrast, we find that structural factors and portfolio effects play a more important role in promoting favorable credit conditions for small firms. Our results highlight the importance of considering these factors in conjunction with regulatory interventions to achieve better outcomes. This study has implications for policymakers and stakeholders, particularly in assessing the appropriateness of extending support factors for different policy purposes.     

Social Networks Analysis in Accounting and Finance*

Social network analysis (SNA) examines whether interactions between individuals, teams, and organizations result in network structures and patterns that can explain important outcomes, including firm performance, management reporting behaviors, investor beliefs, and audit outcomes. This paper reviews the growing body of work on SNA in accounting and finance research, focusing on 162 articles published between 2000 and 2021, and offers a roadmap that may help move this literature forward. Our survey summarizes the elements of SNA, organizes this literature within a theoretical framework, and provides a thematic discussion of the context and contribution of the selected studies. We also discuss opportunities and challenges for future research. Finally, we include an empirical illustration of the key concepts and tools of SNA. We believe that SNA will continue to offer an interesting avenue for conducting high-impact and cross-disciplinary research in accounting and finance.