It is not a flat world after all: Tax repatriation costs and cash value

US corporations have accumulated record‐high amounts of cash, and most of it is trapped in foreign accounts. This study tests the hypothesis that the marginal value of cash decreases in the presence of tax repatriation costs, as these costs are a strong indication that part of the cash is trapped abroad. Cash abroad is not readily available to the company because it is subject to an additional layer of tax before it can be used or distributed. Moreover, uncertainty surrounds the potential use of foreign cash, and research documents that firms holding high amounts of cash abroad are likely to invest in negative net present value activities. Finally, possible changes in tax regulation are an additional source of uncertainty. Consequently, foreign cash should be worth less than domestic cash. Using a large sample of US firms drawn from COMPUSTAT during the 1991–2012 period, the analysis suggests that shareholders value an extra dollar of cash at $1.086. However, this result changes dramatically when the change in cash is interacted with the tax cost of repatriating the earnings. That is, the marginal value of cash decreases significantly in the presence of tax repatriation costs, and shareholders discount cash when it is likely to be held abroad. This study contributes to the literature on cash holding by investigating whether tax repatriation costs affect the value of corporate cash. Moreover, the findings show that there are important economic consequences linked to the phenomenon of cash accumulation in foreign countries and therefore provide regulators with a sound foundation on which to take additional actions to require more disclosure of and transparency in the actual location of firms’ cash holdings.     

Restructuring the Alitalia business model

This paper analyzes the performance of the Italian airline company, Alitalia, after the deregulation in the air transport industry in the European Union. Company performance is analyzed using Tornqvist indices. The evidence shows as Alitalia productivity slowdown has been caused by the company failure to support an increase in input with a supply-oriented strategy.     

Informative Externalities and Pricing in Regulated Multiproduct Industries

This paper addresses the issue of how to organise a two-product industry with interdependent demands when the regulator cannot observe the demand level of the goods produced. Two industry structures are compared: a multiproduct monopoly, in which an informed firm produces both goods, and a differentiated duopoly, where two firms control one good each but the level of demand is known by one firm only. Focusing on the informative costs of regulation, the paper shows that, if goods are substitutes, the regulator may achieve a better performance through integration of production. With complements, instead, decentralisation tends to be preferred.     

Public debt indexation and denomination with an independent central bank

This paper examines the interaction between public debt management and the design of monetary institutions. The analysis shows that delegation of monetary policy to an independent central bank is more effective in containing inflationary expectations than the use of foreign currency or inflation-indexed debt. If delegation of monetary policy is viable, the optimal policy is to issue nominal debt. This increases the sensitivity of taxes and output to unexpected inflation, thus minimizing the inflation needed to offset supply shocks. Evidence on central bank independence, debt composition and output variability suggests that the normative argument has some positive content.     

Big data in smart tourism: challenges,issues and opportunities

In the era of digital transformation, Big Data have assumed a crucial role in changing the global travel and providing significant challenges and opportunities for established companies, as well as new entrants into the tourism industry. All these companies can get valuable information on Big Data for predicting tourist demand, enabling better decision-making, managing knowledge flows and interaction with customers, and providing the best service in a more efficient and effective way. This can result in improved productivity, increased customer satisfaction, personalized marketing campaigns, and more efficient operations. However, open research issues about the role of Big Data in the tourism industry can be still recognized. With these premises, this Editorial aims to present the articles included in the special issue of Current Issues in Tourism titled ‘Big data in smart tourism: challenges, issues and opportunities’, which has called for research contributing to the recent debates on the implications and challenges of the adoption of Big Data to improve the competitiveness of tourism destinations and companies. Main topics considered by the accepted articles include a literature review proposing a novel theoretical investigative frameworks, metrics and critical dimensions, and empirical investigations of the use of Big Data in different tourism contexts.     

Project analysis using a linear approach (P.A.U.L.A.)

We define a general model (called PAULA) for the valuation, optimal management and selection among mutually exclusive safe projects. By exploiting the formal and financial features of the associated linear problems (primal and dual), we put forward two proposals to define an optimal internal financial law (IFL). They may be used to reduce the multiplicity of the IFLs and to avoid economically arbitrary outcomes.Research projectsCariplo andMurst.     

Diversification strategies and scope economies: evidence from a sample of Italian regional bus transport providers

A growing number of Local Public Transport (LPT) companies diversify their production lines by providing a large set of services. We investigate the cost structure of a sample of LPT companies operating in Italy and assess the presence and the magnitude of scope economies. We split the whole sample of firms according to their diversification strategy: private firms, mainly diversifying in competitive transport related services and public firms providing nontransport services in regulated markets. Scope economies appear sizeable for both groups but higher for firms pursuing a transport related strategy, suggesting caution in the multiutility development pursued by public LPT firms in Italy.     

Book review

Smallholder farmers who grow diverse landraces in centres of crop diversity contribute to sustaining the capacity of agricultural and food systems to adapt to change by maintaining crop evolution in their fields today, thus enabling humanity to continue to have the broad genetic variation needed to adapt crops to changes tomorrow. Given this fact, the last 20 years have witnessed an ever-growing interest in on-farm conservation of crop infra-specific diversity. While numerous projects to support it have been, and continue to be, implemented worldwide, there has been very little systematic assessment of the extent to which these projects have been effective at contributing to the maintenance of crop diversity on-farm and the creation of associated benefits for the farmers involved. The factors and relationships implicated in attaining conservation and livelihood results are complex, so that a conceptual scheme that brings them together in a simplified but coherent fashion can be extremely useful for the scientists, donors, policy-makers and practitioners concerned. This paper presents a conceptual framework for analysing on-farm projects, the trade-offs involved and assesses their success in a more systematic way.