ASSET INVESTMENT DIVERSIFICATION, BANKRUPTCY RISK AND THE MEDIATING ROLE OF BUSINESS DIVERSIFICATION

This paper explores the structural relationship among asset investment diversification, business diversification and the bankruptcy risk of firms. Asset investment diversification is divided into two components, namely related and unrelated asset investment diversification, while business diversification includes related and unrelated business diversification. In the hypothetical relationship, business diversification is proposed to play a mediating role to explain the effect of asset investment diversification on bankruptcy risk. Specifically, related and unrelated asset investment diversification affect bankruptcy risk through two mediators, namely related and unrelated business diversification. Hence, it is vital to employ the general linear structural model (GSEM) with panel data on 470 businesses publicly listed in Vietnam from 2008 to 2017. Surprisingly, the empirical results show that both related and unrelated asset diversification have positive impacts on bankruptcy risk. Nevertheless, only related business diversification plays a mediating role between related asset diversification and bankruptcy risk, while unrelated business diversification has an insignificant mediating effect on the relationship between unrelated asset diversification and bankruptcy risk.

Financial Operations in Clubs

Most students have taken a module in accounting, finance or both. There are many aspects of both of these areas (and where they overlap) that apply to clubs. In this chapter, we will present the areas with which students should be familiar, and those which club managers have told us are important. This chapter will focus primarily on ‘big picture’ financial topics, that is, financial areas that are under the purview of the general manager, finance committee, controller, and/or the board of directors. However, club practices differ from those of other hospitality organizations in both large and small ways, many of which affect their financial procedures. For instance, many clubs do not accept cash payments (or credit cards) for services, only allowing members to charge services rendered to their accounts. This obviously impacts who pays, how they pay, cash flows, and systems and procedures. Another example is the importance of dues to clubs – clubs’ greatest source of revenues is usually in dues (quarterly or monthly payments by members). This means that clubs rely greatly on a source of funds that is a function of the number of members, not member activity. Another example of how club finances differ is that they have sources of revenues and expenses that are unique in the hospitality industry, such as initiation fees, ‘unused food minimums’ and ‘unrelated business income’. Add to this that the majority of clubs are operated on a not-for-profit basis, meaning that they manage their operations for the long-term sustainability of the organization and not for short term profit. All of this adds up to clubs representing a unique niche in the area of financial management.

Germany

Up to now little attention has been paid to business groups as a form of enterprise in Germany. It is consequently surprising that during the twentieth century perhaps a quarter of the largest 100 firms qualified as diversified unrelated business groups. These were to be found mainly in three sectors: 1) up to the First World War, large universal banks acted as centers of business groups; only Deutsche Bank went on until the millennium; 2) during the interwar period state-owned enterprises were merged into several large business groups which spun off their parts during the 1990s; 3) many family-owned business groups stayed resilient with their choice of organization. Pyramids were rare within the 100 largest firms.

The Internal Revenue Code and Religious Institutions

This chapter examines the Internal Revenue Code’s treatment of religious entities. The federal tax statute embodies three diverse approaches to taxing and exempting sectarian organizations and activities. Some provisions of the Code—the charitable deduction, the general income tax exemption for eleemosynary institutions, the federal unemployment tax—exempt religious entities and other charitable, educational, and philanthropic institutions. Other provisions of the Code narrowly target churches for tax exemption. For example, the Code relieves churches of filing requirements with which nonchurch religious entities and other eleemosynary organizations must comply. Similarly, churches’ retirement plans receive lenient treatment under the Code. Churches receive procedural protections from IRS audits.Yet other provisions of the Code tax churches as for secular entities. Churches generally pay FICA taxes—Social Security and Medicare payroll taxes—on the compensation paid to nonclerical employees. These payroll taxes can be considerable. Churches also pay federal income taxes on their unrelated business incomes.

Constitutional and Tax Policy Issues

This chapter places the analysis in the book’s context of the extended scholarly debates about the First Amendment and the proper tax treatment of nonprofit entities. These debates include four constitutional controversies: the original understanding of the First Amendment, the relative merits of judicial and legislative decision-making in exempting churches from laws of general applicability, the criteria which should govern legislative exemptions from laws of general applicability, and the rhetoric of separationism under the First Amendment. In addition, It places the book’s analysis in the context of two important tax policy controversies: the possible income taxation of non-profit institutions and the future of the unrelated business income tax (UBIT). This chapters address each of these debates in the context of taxing and exempting churches. The underlying theme of this final chapter is that discussion both of the First Amendment and of tax policy would be enhanced by greater attention to the considerations at play when taxing or exempting churches and to the various policies which Congress and the state legislatures have embraced in response to these considerations.