Italian economy faces tougher challenges in 2022

Significance This fast growth will more than offset the impact of the pandemic, which pulled down real output by 8.9% in 2020. Nevertheless, there are significant downside risks associated with inflation, monetary policy and political uncertainty. Impacts Italy faces higher borrowing costs in the new year as the ECB gradually tightens its ultra-loose monetary policy. If the winter is cold and Russian energy supplies run short, Italy will have to tap its strategic reserves to slow the growth of prices. Skilled labour shortages, weak productivity and inefficient public bureaucracy will weigh on medium-to-long-term growth.

Political connections, political uncertainty and audit fees: evidence from Pakistan

Purpose This paper aims to examine the association between political connections, political uncertainty and audit fees. The authors use various measures of political connections and uncertainty: political connections (civil and military), political events (elections) and a general measure of political stability (i.e. a world bank index). Design/methodology/approach The authors measure the association between political connections, political uncertainty and audit fees. Audit fees reflect auditors’ perceptions of risk. The authors examine auditors’ business risk, clients’ audit and business risk after controlling for the variables used in prior audit fee research. Findings Results indicate that civil-connected firms pay significantly higher audit fees than non-connected firms owing to the instability of civil-political connections. Military-connected firms pay significantly lower audit fees than non-connected firms owing to the stable form of government. Furthermore, considering high leverage as a measure of clients’ high audit risk and high return-on-assets (ROA) as a measure of clients’ lower business risk, the authors interact leverage and ROA with civil and military connections. The results reveal that these risks moderate the relationship between political connection and audit fees. Election risk is independent of risk associated with political connections. General political stability reinforces the theme that a stable government results in lower risks. Originality/value The authors combine cross-sectional measures of political uncertainty (civil or military connections) with time-dependent measures (general measures of political instability and elections).

Corruption News and Corporate Investment: Evidence from China

We examine whether corporate corruption scrutiny affects corporate investment in China. A corruption news index (CNI) containing firm-specific measures of corruption scrutiny was developed by tracking all articles in the press about corruption for all firms trading on the Shanghai and Shenzhen stock exchanges between 2000 and 2016. We found that a standard deviation increase in CNI is associated with a modest and short-lived decline in investment, ranging from 2 to 10 percent, with a stronger effect among SOEs. We explore two channels that can explain the CNI-investment effect: (i) a shift in the cost of external finance and (ii) a rise in political uncertainty connected with corporate corruption scrutiny. Our results indicate that CNI lowers the cost of external finance, pointing to a beneficial aspect of corruption cleanup. However, the effect of CNI on investment is amplified in the presence of provincial political turnover, providing support for the political uncertainty channel. The results also indicate that the negative effect of CNI on investment has significantly declined since 2013, supporting the proposition that the long-term benefits of corruption cleanup outweigh the short-term costs associated with policy uncertainty.

Spanish government should survive its full term

Significance However, as opinion polls show that contending left- and right-wing party blocs are closer in terms of voting intentions, the government's performance and ability to collaborate with smaller parties remain key to the left’s ability to return for another term in office. Impacts Tight electoral competition between left and right points to a couple of years of political uncertainty for international investors. In the event of an early election, the most plausible scenario is a coalition of the centre-right People's Party and far-right Vox. The People's Party’s move further to the right could open space for the liberal Ciudadanos party to reclaim centrist support.

Sources for political conversations in Late Republican Rome

Chapter 2 considers Cicero’s letters, which are the main source of this book. These letters are exceptional since they were largely written shortly after conversations took place and, although they underwent several processes of selection throughout their transmission, they were not rewritten and are deprived of hindsight bias. Thus, they provide us with an insider’s perspective on conversations and politics, transmitting the political uncertainty of the period. This contrasts with how later historians, from Nicolaus of Damascus onwards, depicted political conversations during the Roman Republic, paying attention to other elements and markers, such as non-verbal gestures, instead of focusing (as Cicero did) on the impressions from conversations, feelings, and speculations about the future.

Georgian run-off votes will test political stability

Significance The charges reflect the Georgian Dream government's determination to keep Saakashvili incarcerated and to disregard foreign criticism. They come as Georgian Dream and the opposition prepare to fight re-run elections across the country and in key cities. Impacts Relations with Western partners, especially the EU, will become more complicated. Ties with Ukraine could become difficult because of the Saakashvili case. Political uncertainty will raise further questions about the viability of the Anaklia deep-sea port project.