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on Accounting and Auditing |
| By: | Jochen Zimmermann (University of Bremen - Faculty of Business Studies and Economics & ZenTra); Jan-Christoph Volckmer (University of Bremen - Faculty of Business Studies and Economics) |
| Abstract: | As financial markets have increasingly globalised, the regulatory framework is still nationally fragmented. One core regulatory element is the provision of assurance services by accounting firms. The Big 4 - the leading international providers of audit services Ð are not as international as are accounting standards or their clients. The paper traces three facets of the transnationalization of accounting firms: explanations for internationalization rooted in the theory of the firm, their modes of internal organization and limits to further transnationalization. Accounting firms are professional service firms with low fixed and high intangible assets. This limits the theories that can explain the internationalization of firms. We examine which theories are the most promising to explain the internationalization of the Big 4. Regarding their internal structures, our empirical analysis suggests that Big 4 accounting firms aspire to develop an integrated network structure which is known from the transnational corporation of the Bartlett and Ghoshal typology. This becomes particularly manifest in international staff exchange. Accounting firms are also deeply embedded in the regulatory framework. Its national fragmentation sets limits to further globalisation of assurance services. |
| Keywords: | Accounting firms, professional service firms, internationalization, regulatory embeddedness |
| JEL: | F23 L22 L84 L50 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:zen:wpaper:11&r=acc |
| By: | Runkel, Marco; Hoffmann, Magnus |
| Abstract: | This paper contributes to resolving the puzzle that in practice most countries use ad valorem (corporate income) taxation, while a large part of the tax competition literature views business taxes as unit (wealth) taxation. We point to the dual role that corporate taxation plays in attracting mobile capital, on the one hand, and in absorbing economic rents, on the other hand. In contrast to the previous literature, we show (i) that detrimental tax competition may be less severe in a system of ad valorem taxes than in a system of unit taxes and (ii) that ad valorem taxation may be the equilibrium outcome in a decentralized world where countries decide themselves on the tax system. Interestingly, the decentralized choice of the ad valorem system may be a prisoner's dilemma since the countries' welfare may be higher if they choose unit taxes. -- |
| JEL: | H21 H25 H77 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62079&r=acc |
| By: | Strecker, Nora; Egger, Peter; Radulescu, Doina |
| Abstract: | Profit taxes are widely acknowledged to influence the location of firms' headquarters. This paper sheds light on the role of aspects of labor taxation for the international location of headquarters. We construct a unique data set of effective labor taxes in 120 countries and use data on the location of 35,206 firms to analyze the impact of labor income tax rates, the progressivity of the income tax schedule, and social security contributions on firms' decisions where to locate their headquarters. The findings suggest that both a higher progressivity of the tax system and higher (employee- and employer-borne) social security contributions negatively influence a country's attractiveness for headquarters location. A one percentage point increase in a country's average labor income tax rate reduces its probability to be chosen as the headquarters location for the average firm by about 1.2 percentage points. -- |
| JEL: | H24 C25 H22 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:62086&r=acc |
| By: | Norman Gemmell; Richard Kneller; Danny McGowan; Ismael Sanz |
| Abstract: | Firms that lay far behind the technological frontier have the most to gain from imitating the technology or management practices of others. That some firms converge relatively slowly to the productivity frontier suggests the existence of factors that cause them to under-invest in their productivity. In this paper we explore whether higher rates of corporate taxation affect firm productivity convergence because they reduce the after tax returns to productivity enhancing investments for small firms. Using data for 11 European countries we find evidence for such an effect; productivity growth in small firms is slower the higher are high corporate tax rates. Our results are robust to the use of instrumental variable and panel data techniques with quantitatively similar effects found from a natural experiment following the German tax reforms in 2001. |
| Keywords: | Productivity, taxation, convergence JEL classification: D24, H25, L11, O31 |
| URL: | http://d.repec.org/n?u=RePEc:not:notecp:12/06&r=acc |
| By: | Mazen Kebewar; Syed Muhammad Noaman Ahmed Shah |
| Abstract: | Current study aims to provide new empirical evidence on the impact of debt on corporate profitability. This impact can be explained by three essential theories: signaling theory, tax theory and the agency cost theory. Using panel data sample of 2240 French non listed companies of service sector during 1999-2006. By utilizing generalized method of moments (GMM) econometric technique on three measures of profitability ratio (PROF1, PROF2 and ROA), we show that debt ratio has no effect on corporate profitability, regardless of the size of company (VSEs, SMEs or LEs) |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1301.0072&r=acc |
| By: | Neumann, Dirk; Bargain, Olivier; Dolls, Mathias; Fuest, Clemens; Peichl, Andreas |
| Abstract: | One central lesson of the sovereign debt crisis is that the Eurozone (and the EU) needs institutional reform. Many observers argue that the monetary union should be complemented by a fiscal union . In this paper we provide the first quantitative analysis of important economic effects of an EU income tax. Using the European tax-benefit calculator EUROMOD, we simulate detailed individual budget curves in order to estimate an average EU tax system . Three key issues are analyzed: firstly, we assess the direct distributional implications of an EU tax (partly) replacing national tax systems. Applying different voting schemes, we especially investigate whether such a step could find political support in each country and the EU as a whole. Secondly, by using behavioral simulation techniques we analyze the impact of introducing a common tax on economic efficiency and adjust the distributional effects accordingly. Thirdly, we investigate the potential of an EU income tax to act as an automatic fiscal stabilizer in the event of an asymmetric shock. We derive crucial policy implications from our simulation exercise for the reform of the Eurozone and shed some light on a very important set of questions: How would further fiscal integration economically affect different households in the different member states? How would it affect automatic stabilizers in the EU? -- |
| JEL: | H20 H31 J22 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:66063&r=acc |
| By: | Hönig, Anja |
| Abstract: | The empirical investment literature provides evidence on financing constraints mostly by estimating cash-flow sensitivities for a priori (un-)constrained firms or develops rather ad-hoc indicators to explain firms' differential access to external capital. However, the sources and determinants of financing constraints often remain unclear. Furthermore, none of the indicators suggested so far provides a role for taxation in explaining firms' credit supply. We fill this gap using recently developed theoretical approaches that explain how profit taxes and internal funds impact firms' access to external capital and subsequent investment levels. Based on the theoretical variables expected to matter for a firm's access to credit, we provide empirical evidence using a unique micro dataset of merged survey and financial statement data provided by the Ifo Institute in Munich. In contrast to previous studies, we measure firms' credit constraints directly and use a broad set of balance sheet and qualitative parameters as controls. Preliminary results point to a significant role of pledgeable income and underline the importance of own funds and expected output for obtaining external finance. Furthermore, a firm s size and age have a significant impact on firms' access to external funds. The results are robust to various specifications and confirm previous results. Taxation, by reducing pledgeable income, is found to exert a positive effect on the probability of being financially restricted. -- |
| JEL: | D22 G32 H32 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:vfsc12:66053&r=acc |