Real Effects of Tax Uncertainty: Evidence from Firm Capital Investments

2021 ◽  
Author(s):  
Martin Jacob ◽  
Kelly Wentland ◽  
Scott A. Wentland
Keyword(s):  
Policy Change ◽  
Accounting Information ◽  
Investment Decisions ◽  
Underlying Mechanism ◽  
Capital Investments ◽  
Growth Opportunities ◽  
Public Accounting ◽  
Real Effects ◽  
Hurdle Rate ◽  
Tax Uncertainty

This paper examines whether tax uncertainty can alter investment decisions, focusing primarily on the timing of large capital investments. Empirically, we exploit the staggered implementation of Schedule UTP, a discrete policy change expected to increase tax uncertainty, finding that, on average, firms responded by delaying large capital investments. This effect is stronger among firms at which the policy treatment is particularly germane, that is, for firms with more material UTBs or with low-to-moderate quality public accounting information. We also test the underlying mechanism, finding that managers buffer against higher tax uncertainty with cheaper sources of financing (cash) and that the investment effect is concentrated among financially constrained firms. The results show that Schedule UTP also reduces the sensitivity of investment to growth opportunities (investment-Q sensitivity) in line with a higher hurdle rate for firms facing higher tax uncertainty. This paper was accepted by Brian Bushee, accounting.

Impact Of Changes In Strategic Investments On Shareholder Returns: The Role Of Growth Opportunities

2011 ◽  
Vol 19 (1) ◽  
Author(s):  
Ashay Desai ◽  
Peter Wright ◽  
Kee H. Chung ◽  
Charlie Charoenwong
Keyword(s):  
Investment Decisions ◽  
Empirical Support ◽  
Capital Investments ◽  
Font Size ◽  
Growth Opportunities ◽  
Shareholder Returns ◽  
Strategic Investments ◽  
Managerial Decisions ◽  
Growth Opportunity

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-family: &quot;Times New Roman&quot;,&quot;serif&quot;; font-size: 10pt;">We argue that a firm&rsquo;s growth opportunity may provide us with guidelines on whether increases or decreases in capital investments may contribute to that firm&rsquo;s returns to shareholders.<span style="mso-spacerun: yes;">&nbsp; </span>We find consistent empirical support for &ldquo;good&rdquo; managerial decisions.<span style="mso-spacerun: yes;">&nbsp; </span>That is, we find that increases in capital investments by firms with growth opportunities enhance their returns to shareholders.<span style="mso-spacerun: yes;">&nbsp; </span>The results indicate that decreases in strategic investments increase the returns to shareholders of those firms lacking in growth opportunities.<span style="mso-spacerun: yes;">&nbsp; </span>The findings, however, are not consonantally significant for &ldquo;bad&rdquo; managerial investment decisions - - decreases in investments by firms with growth opportunities or increases in investments by firms lacking in growth opportunities.</span></p>

scholarly journals ASSESSMENT OF THE ROLE OF ACCOUNTING INFORMATION ON EFFECTIVE INVESTMENT DECISION - THE CASE OF BANQUE POPULAIRE DU RWANDA ATLASMARA

2021 ◽  
Vol 6 (3) ◽  
Author(s):  
James Hodari
Keyword(s):  
Decision Making ◽  
Data Collection ◽  
Investment Decision ◽  
Accounting Information ◽  
Investment Decisions ◽  
Target Population ◽  
Staff Members ◽  
Investment Decision Making ◽  
Secondary Methods

The purpose of this study is to assess the role of accounting information on effective investment decisions at Banque Populaire du Rwanda Atlasmara. The target population was 50 staff members. The study used a primary method that involved questionnaires. Secondary methods of data collection involved a desk review of relevant materials. Data collection was then analyzed by using SPSS software. The study indicated a significant correlation between accounting information and investment decisions and all rely on information for an investment decision. It was seen from the analysis of responses, 83% argued always use accounting information for investment. It was revealed that the quality of accounting information in terms of its accuracy, adequacy, reliability, and mode of disclosure is a pertinent element of efficiency of investment decision making. The study recommends that commercial banks should use accounting always to increase the accuracy of their investment decision-making. The study recommends that Banque Populaire du Rwanda should consult the accounting information before making investment decisions and all interested parties to accounting information should use necessary financial ratios analysis for an investment decision. The study concludes that there is a significant correlation between accounting information and investment decision. JEL: M10; M41; R42 <p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/edu_01/0845/a.php" alt="Hit counter" /></p>

Agreeing to disagree: structuring future capital investment provisions in joint ventures

2020 ◽  
Vol 13 (1) ◽  
pp. 12-22
Author(s):  
Edgar Elliott ◽  
Lois D’Costa ◽  
James Bamford
Keyword(s):  
Joint Ventures ◽  
Capital Investment ◽  
Joint Venture ◽  
Investment Decisions ◽  
Capital Investments ◽  
Agreeing To Disagree ◽  
Structural Work ◽  
Opt Out ◽  
Contractual Structures

Abstract Prior to entering into any joint venture agreement (JVA), dealmakers should be aware of the options available to resolve future investment disagreements. There are three broad capital investment structures commonly found in joint ventures: (i) standard passmark rules; (ii) non-consent/opt-out; and (iii) sole risk. Within each category, deal practitioners have numerous options to tailor capital investment structures. As much as possible, deal practitioners should contemplate the most likely areas of disagreement, and then tailor the capital investment structures appropriately to ensure that the joint ventures (JV) can manage capital investment decisions in an efficient, value-preserving way. While it is impossible to establish a formula to determine which specific contractual structures will best accommodate future capital investments in a given JV, companies should weigh various factors to inform their position. We reviewed 40 JVAs to understand various capital investment mechanics and how they differ based on the nature of the venture and owner context. Our research found an extremely diverse array of creative structural work-arounds to address different owner appetites to make future capital investments. The purpose of this article is to describe, illustrate and provide benchmarks on different mechanics and contractual terms found in joint venture agreements, and to offer guidance as to which future capital investment mechanics should be included in venture agreements.

Promotion Signaling and Human Capital Investments

2020 ◽  
Vol 12 (1) ◽  
pp. 125-155 ◽  
Author(s):  
Michael Waldman ◽  
Ori Zax
Keyword(s):  
Human Capital ◽  
Labor Market ◽  
Capital Investment ◽  
Investment Decisions ◽  
Human Capital Investment ◽  
Capital Investments ◽  
Human Capital Investments ◽  
Asymmetric Learning ◽  
Specific Human Capital ◽  
Investment Choices

In a world characterized by asymmetric learning, promotions can serve as signals of worker ability, and this, in turn, can result in inefficient promotion decisions. If the labor market is competitive, the result will be practices that reduce this distortion. We explore how this logic affects human capital investment decisions. We show that, if commitment is possible, investments will be biased toward the accumulation of firm-specific human capital. We also consider what happens when commitment is not possible and show a number of results including that, if investment choices are not publicly observable, choices are frequently efficient. (JEL D82, J24, J31, M12, M51)

The Origins and Real Effects of the Gender Gap: Evidence from CEOs’ Formative Years

2020 ◽  
Author(s):  
Ran Duchin ◽  
Mikhail Simutin ◽  
Denis Sosyura
Keyword(s):  
High Schools ◽  
Gender Inequality ◽  
Gender Gap ◽  
Investment Decisions ◽  
Capital Budgeting ◽  
Investment Efficiency ◽  
Real Effects ◽  
Investment Capital ◽  
Male Dominated ◽  
Division Managers

Abstract Using individual census records, we provide novel evidence on CEOs’ socioeconomic backgrounds and study their role in investment decisions. Male CEOs allocate more investment capital to male than female division managers. This gender gap is driven by CEOs who grew up in male-dominated families where the father was the only income earner and had more education than the mother. The gender gap also increases for CEOs who attended all-male high schools and grew up in neighborhoods with greater gender inequality. The effect of gender on capital budgeting introduces frictions and erodes investment efficiency.

scholarly journals Discounting Immigrant Families: Neoliberalism and the Framing of Canadian Immigration Policy Change: A Literature Review

2021 ◽  
Author(s):  
Jesse Root ◽  
Erika Gates-Gasse ◽  
John Shields ◽  
Harald Bauder
Keyword(s):  
Literature Review ◽  
Conceptual Framework ◽  
Policy Change ◽  
Immigration Policy ◽  
Immigrant Families ◽  
Partnership Development ◽  
Social Sciences And Humanities ◽  
Real Effects ◽  
The Social ◽  
Canadian Immigration

Abstract This paper aims to develop a conceptual framework to assist in understanding how the immigrant family is impacted by recent changes to immigration policy in Canada. We contend that neoliberalism, broadly defined, is a helpful lens through which to comprehend some of the specific policies as well as discursive outcomes which have real effects on immigrant families. Based on our findings from an in-depth literature review, our goal is to identify and summarize the recent changes to the Canadian policy environment and to develop a critical conceptual framework through which to understand policy change in relation to families and immigrants. Key Words: families, neoliberalism, policy change, social policy, multiculturalism, gender, race, neoconservatism Acknowledgements The research for this paper was supported by a Partnership Development Grant titled “Integration Trajectories of Immigrant Families” by the Social Sciences and Humanities Research Council of Canada.

scholarly journals PENGARUH GROWTH OPPORTUNITY, STRUKTUR MODAL DAN KEBIJAKAN DIVIDEN TERHADAP KEPUTUSAN INVESTASI PADA PERUSAHAAN MANUFAKTUR YANG TERDAFTAR DI BURSA EFEK INDONESIA (BEI)

2020 ◽  
Vol 4 (2) ◽  
pp. 123
Author(s):  
Maria Karolina Kewa ◽  
Gendro Wiyono
Keyword(s):  
Capital Structure ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Investment Decisions ◽  
Secondary Data ◽  
Manufacturing Companies ◽  
Growth Opportunities ◽  
Growth Opportunity ◽  
The Social ◽  
Company Growth

This study aims to determine whether there is an influence of growth opportunities, capital structure and dividend policy on investment decisions in manufacturing companies in the consumer goods industry sector which are listed on the Indonesia Stock Exchange (IDX) during the 2015-2018 period. The factors tested are growth opportunities, capital structure and dividend policy and investment decisions. The data used in this study are secondary data and this study uses 18 samples of manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the 2015-2018 period. This study uses the Social Sciences Statistics Package (SPSS) version 17.0 to determine the results of the hypothesis. Tests using SPSS get results that show that: 1) growth opportunities have a positive and significant influence on investment decisions; 2) capital structure has a positive and significant effect on investment decisions; 3) dividend policy has a negative and significant effect on investment decisions; 4) growth opportunity variables (company growth opportunities, capital structure, dividend policy simultaneously influence investment decisions.Kata Kunci: Incentives, Employee Discipline

Sign in / Sign up

Export Citation Format

Share Document