The impact of the EU Directive on non-financial information: Novel features of the Italian case

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rosa Lombardi ◽  
Antonietta Cosentino ◽  
Alessandro Sura ◽  
Michele Galeotti

Purpose This paper aims to examine the European Union (EU) 95/2014 Directive’s impact on large public companies. It chose Italy as a pivotal country that made non-financial information assurance mandatory, going beyond the EU Directive’s original requirements. Specifically, it investigates how the UE Directive fosters institutionalisation of the non-financial reporting (NFR) process in organisations. Design/methodology/approach Two large public companies in Italy are used as case studies. Data are gathered from annual and integrated reports, institutional websites and semi-structured interviews with the managers and employees involved in different organisational positions. The authors adopted the neo-institutional theory as a theoretical lens to identify the organisations’ response to the (external) institutional pressures influencing corporate reporting practices. Findings The findings demonstrate how the EU Directive fostered changes to large public companies’ reporting practices and external pressures contributed to influencing changes to internal organisational practices in terms of new internal processes, procedures and structures. These changes are motivated by the companies’ need to guarantee reliable information to be produced in their non-financial reports. Practical implications This paper helps academics and policymakers to advance NFR practices by understanding regulatory factors that can foster changes in the internal reporting process and responsibility within organisations. Originality/value The findings provide some empirical insights to foster reflections on the EU Directive’s effectiveness in changing reporting practices. This paper contributes to enriching the literature on institutional theory in shaping mandatory non-financial disclosure by identifying the institutional pressures influencing the effectiveness of regulations to change NFR practices.

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rita Monteiro ◽  
Sónia Silva

Purpose The purpose of this study is to examine the impact of the transposition of the EU directive that regulates M&As on cross-border deals. Acquirers of targets located in the European Union (EU) must comply not only with takeover rules set individually by member states but also with European Council Directives. The most significant of these Directives in the context of mergers and acquisitions (M&As) is the Takeover Bids Directive (TBD). The intent of the Directive is to ensure equal treatment for all companies launching takeover bids or that are subject to a change in control, providing minimum harmonization rules in view of creating a transparent environment for cross-border takeovers. Design/methodology/approach This study uses the event-study and difference-in-differences approaches. Findings Using a sample of 2,129 M&As conducted between 2000 and 2015, this paper finds positive acquisition synergy for acquirers targeting firms from countries with stronger investor protection rules compared to the average of the EU, but no evidence regarding cross-border deals. The results support the prediction that regulation makes countries diverge more depending on their ex ante level of investor protection. Originality/value This study examines the impact of the enactment of the TBD on announcement returns of M&As in the EU.


2020 ◽  
pp. 98-121
Author(s):  
Alanas Gulbinas ◽  
Kamilė Jogminaitė

“Article of digital business taxation issues and threats”, analyzes the impact of the digitalization in modern society and the changes of corporate profit tax. This article has been concentrated on the regulation of the European Union but mentions the international adjustments as well. The article has been written in a discussion of national law and bilateral agreements, which apply to the traditional permanent headquarters concept. This article discusses the current situation, where digital businesses are not being taxed with corporate profit tax, and possibilities to change it according to the needs of the digital economy In addition, when digital businesses emerged, the permanent headquarters concept, which taxed based on the permanent location, required further discussion and a new definition. Therefore, the article talks over the proposals of the European Union to equalize corporate profit taxation. The article analyzes the possible consequences and issues of the adaptation of the EU directive. In question of regulating the corporate profit tax, the authors discussed the competence of the EU.


2020 ◽  
Vol 3 (1) ◽  
pp. 113-133
Author(s):  
Guangling Zhang ◽  
Chenchen Liu ◽  
Hui Wang

PurposeCurrently, the issues of cross-channel integration (CCI) have become the attentive focus. However, little research based on institutional theory details the drivers of and obstacles to adopt CCI strategy. Combined with resource-based view (RBV) and institutional theory, this thesis studies the effect of institutional pressures on the manufactures' extent of CCI, through exploring the moderating effects of firm's technology competence and relationship governance capabilities on the relationship between institutional pressures and the extent of CCI.Design/methodology/approachThe survey data of 249 valid research samples were obtained from Chinese manufacturing enterprises. Statistical software such as SPSS 22.0 and AMOS 18.0 was used to analyze the data and test the conceptual model and relevant research hypotheses from an empirical perspective.FindingsThe results of empirical study from 249 manufacturers indicate that the mimetic, coercive and normative pressures perceived by enterprises can significantly promote their extent of CCI; relationship governance capabilities attenuate the positive impact of mimetic pressures on the extent of CCI, but strengthen that of normative pressures on the extent of CCI; besides, technology competence can attenuate the positive effect of mimetic pressures on the extent of CCI, but enhance that of normative pressures on the extent of CCI.Originality/valueFew studied the impact of the interaction of internal capabilities and external institutional pressures on CCI of enterprises. This study combines institutional theory and resource-based view to fill the theoretical gap in this regard.


2019 ◽  
Vol 4 (4) ◽  
pp. 365-394
Author(s):  
Rong-Her Chiu

Purpose The first well-known liner shipping conference was created for the UK/Calcutta trade in 1875. However, the European Union (EU) decided to abolish repeal the liner conferences system with effect from October 18 2008. This paper aims to study the governing regulations on shipping conferences in Taiwan along with investigating the impact on the EU to repeal conferences. The regulation on liner conferences in the USA is also briefly referred. Design/methodology/approach Literature review and questionnaire survey are used to conduct the study. This paper reviews important literature relating to the EU to repeal the conferences system and its impact on liner market competition to/from European trade routes, with discussions on the US and Taiwan regulations on shipping conferences. Questionnaire survey data, collected from published report and this research present shippers’ and carriers’ responses on the changes of regulations on liner conferences. Findings Shippers are strongly supporting the repeal of the conferences system. Academic research results basically reveal that the liner market will be more competitive in the trades to/from the USA and the EU after the repeal of the conferences. For Taiwan, its regulations are rather simple and loosely control over the liner conferences; therefore, if the shipping administration intends to enhance the inspection of the agreements of conferences and strategic alliances, more detailed regulations should be prepared, and the provisions of the EU or USA would be a good reference. Practical implications Through the discussions on the legal treatments of shipping conferences from the USA, the EU and Taiwan perspectives, this paper provides shipping researchers with not only a clear evolution of the liner conferences but also a deep understanding of the impact to repeal the conferences on liner market competition. Originality/value This paper reviews important literature and related legislations on liner conferences including the USA, the EU and Taiwan. The different responses on the EU to repeal the conferences system from shippers and carriers are discussed. The impact on liner market competition is presented.


2020 ◽  
Vol 28 (5) ◽  
pp. 701-725
Author(s):  
Matteo La Torre ◽  
Svetlana Sabelfeld ◽  
Marita Blomkvist ◽  
John Dumay

Purpose This paper introduces the special issue “Rebuilding trust: Sustainability and non-financial reporting, and the European Union regulation”. Inspired by the studies published in the special issue, this study aims to examine the concept of accountability within the context of the European Union (EU) Directive on non-financial disclosure (hereafter the EU Directive) to offer a critique and a novel perspective for future research into mandatory non-financial reporting (NFR) and to advance future practice and policy. Design/methodology/approach The authors review the papers published in this special issue and other contemporary studies on the topic of NFR and the EU Directive. Findings Accountability is a fundamental concept for building trust in the corporate reporting context and emerges as a common topic linking contemporary studies on the EU Directive. While the EU Directive acknowledges the role of accountability in the reporting practice, this study argues that regulation and practice on NFR needs to move away from an accounting-based conception of accountability to promote accountability-based accounting practices (Dillard and Vinnari, 2019). By analysing the links between trust, accountability and accounting and reporting, the authors claim the need to examine and rethink the inscription of interests into non-financial information (NFI) and its materiality. Hence, this study encourages research and practice to broaden mandatory NFR practice over the traditional boundaries of accountability, reporting and formal accounting systems. Research limitations/implications Considering the challenges posed by the COVID-19 crisis, this study calls for further research to investigate the dialogical accountability underpinning NFR in practice to avoid the trap of focusing on accounting changes regardless of accountability. The authors advocate that what is needed is more timely NFI that develops a dialogue between companies, investors, national regulators, the EU and civil society, not more untimely standalone reporting that has most likely lost its relevance and materiality by the time it is issued to users. Originality/value By highlighting accountability issues in the context of mandatory NFR and its linkages with trust, this study lays out a case for moving the focus of research and practice from accounting-based regulations towards accountability-driven accounting change.


Author(s):  
Wendy L. Tate ◽  
Lisa M. Ellram ◽  
Kevin J. Dooley

Purpose – Suppliers play a more significant role in the environmental footprint of supply chains than most final manufacturers. The purpose of this paper is to apply transaction costs and institutional theory to help understand why the more conservative, or reactive suppliers may or may not be likely to adopt environmental practices. Design/methodology/approach – This research builds on a prior conceptual paper and uses the results of a survey to test whether transaction costs and institutional theory can provide insight into supplier's adoption of environmental practices. Findings – This research finds that perceived transaction costs affect supplier cooperation in adopting environmental practices. Suppliers are more likely to adopt an environmental practice if information-seeking costs are low or the cost of adoption is considered necessary to maintain the relationship. Data did not support the hypotheses concerning institutional pressures. Originality/value – There is much research in the area of proactive adoption of environmental business practices. This research looks specifically at what influences the adoption of environmental business practices by suppliers that are more reactive or hesitant to be leaders in this area.


2017 ◽  
Vol 18 (3) ◽  
pp. 67-71
Author(s):  
Simon Crown ◽  
Steven F. Gatti ◽  
Matthias Feldman ◽  
Paul Landless

Purpose An update for firms located outside the European Union of the possible extra-territorial impact of certain provisions in the recast Markets in Financial Instruments Directive and Markets in Financial Instruments Regulation (together referred to as “MiFID2”). Design/methodology/approach The focus is on the issues that are most likely to have an impact on non-EU firms, including buy/sell side financial institutions and private banks. Findings That the impact of MiFID2 will be felt far beyond the EU, particularly in relation to product governance, inducements and dealing commission, trading obligations, position limits for commodity derivatives and the new regime for accessing EU markets. Practical implications Non-EU firms need to assess their interaction with EU clients, counterparties and markets to identify the likely impact of MiFID2. Relevant interaction could include: manufacturing and distribution of financial instruments; the provision of investment research and dealing services to EU clients and trading in instruments which are admitted to trading on EU markets. Originality/value This article will be of interest to “third-country” firms, located outside the EU, but with a European connection, either in terms of European counterparties, investors or accessing European markets.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Arif ◽  
Christohper Gan ◽  
Muhammad Nadeem

Purpose Motivated by the enactment of non-financial reporting regulations by the European Parliament, this paper aims to investigate the impact of European Union (EU) directive 2014/95/EU on the quantity of environmental, social and governance (ESG) disclosures by the S&P Europe 350 index firms. This study also investigates whether the implementation of the non-financial information (NFI) reporting regulations influences the association between ESG disclosures and firms’ earnings risk. Design/methodology/approach To measure the impact of mandatory regulations on the quantity of ESG disclosures, this study estimates the average treatment effects using a propensity weighted sample. Then this study uses the difference-in-differences method to estimate the differences in the association between ESG disclosures and earning risk before and after implementation of the EU directive. Findings The results show a significant positive impact of the EU directive on the quantity of ESG disclosures for the sample European public-interest entities, which indicates that the mandatory NFI reporting requirements could boost the availability of increasingly demanded ESG related information. The enhanced association between the ESG disclosures and firms’ earnings risk during the post-directive period reveals that mandating NFI reporting also increases the quality of ESG disclosures. Originality/value Using the legitimacy and decision-usefulness theories, this study provides novel evidence concerning the impact of the EU directive on the quantity and quality of ESG disclosures.


2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Edit Lippai-Makra ◽  
Zsuzsanna Ilona Kovács ◽  
Gábor Dávid Kiss

PurposeThis paper aims to investigate the non-financial reporting (NFR) practices of Hungarian listed public interest entities for 2016–2018 in terms of the required disclosure content based on the 2014/95/EU Directive (ED).Design/methodology/approach The authors apply content analysis methodology on Hungarian firms subject to mandatory reporting under the ED. The target variable in the multivariate model is the reporting quality (Qi) measured by a combined index.Findings The authors find that the ED had a moderate impact on Hungary's reporting quality because the overall disclosure of the sample only increased from low to medium level. The authors found that the value of intangible assets is a determinant of the reporting quality before and after the implementation of the ED. The findings support the effect of coercive isomorphism on Hungarian NFR practices.Research limitations/implications The limitation of the research is the number of firms examined. However, the authors covered the entire (non-bank) community of the Hungarian firms subject to the ED.Practical implications The authors suggest that reporting entities build upon the synergy between intellectual capital disclosure and NFR when elaborating their reporting strategies. The authors recommend the integration of ethical matters into corporate strategies and policies. Policymakers may consider the revision of the Hungarian regulations. The authors suggest academics embrace these topics in teaching.Originality/value To the best of the authors’ knowledge, this is the first study that investigates the impact of ED in the context of Hungary. The authors contribute to the existing literature by adding the results of the ridge regression model, highlighting the importance of intangible assets.


2019 ◽  
Vol 28 (5) ◽  
pp. 863-887
Author(s):  
Patrizia Di Tullio ◽  
Diego Valentinetti ◽  
Christian Nielsen ◽  
Michele Antonio Rea

Purpose This paper aims to investigate how firms disclose the presentation and content of business model (BM) information in corporate reports to manage their legitimacy in response to European Directive 2014/95. Design/methodology/approach Legitimacy theory is used to identify disclosure strategies pursued by firms in reaction to the new regulation. To understand how firms adopt these strategic responses, semiotic analysis is applied to a sample of European companies’ reports through Crowther’s (2012) framework, which is based on a mechanism of binary oppositions. Findings Half of the sample strategically choose to comply with the European Union (EU) Directive regarding BM information through the use of non-accounting language, figures, and diagrams. Other firms did not disclose any substantive information but managed the impression of compliance with the regulation, while the remainder of the sample dismissed the regulation altogether. Research limitations/implications This study demonstrates how organisations use the disclosure of BM information in their corporate reports to control their legitimacy. The results support the idea that firms can acquire legitimacy by complying with the law or giving the impression of compliance with the regulation. This study provides evidence on the first-time adoption of the EU Directive, and therefore, future research can enlarge the sample and conduct the analysis over a broader time frame. Practical implications A more precise indication of the EU Directive regarding “where” firms should report BM information, “how” the description of a BM should refer to the environmental, social, governance (ESG) factors, and a set of performance measures to track the evolution of a company’s BM overtime is needed. Originality/value While there has been a notable amount of research that has applied content analysis methodologies to investigate the thematic and syntactic aspects of BM disclosure in corporate reports, only a few studies have investigated BM disclosures in relation to the EU Directive. Furthermore, the application of semiotic analysis extends beyond traditional content analysis methodologies because it considers the structure of the story at many levels, thus developing a more complete textual picture of how BMs are described, allowing an analysis of the reasons behind the disclosure strategies pursued by firms.


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