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Article
Publication date: 30 September 2022

Dawei Jin, Hao Shen, Haizhi Wang and Desheng Yin

The purpose of this paper is to empirically explore whether and to what extent the changes in state corporate income tax rates affect corporate tax aggressiveness.

Abstract

Purpose

The purpose of this paper is to empirically explore whether and to what extent the changes in state corporate income tax rates affect corporate tax aggressiveness.

Design/methodology/approach

Using a differences-in-differences approach with dynamic treatment, the authors investigate the effect of staggered changes in state corporate income tax rates in the USA on corporate tax aggressiveness.

Findings

Firms become more aggressive in avoiding taxes following state tax increases but are insensitive to tax cuts. The effect of state tax increases on tax aggressiveness is weaker for firms with greater debt tax shields and marginal tax rates. Firms are more likely to shift their operations and relocate their headquarters out of states experiencing tax increases.

Originality/value

To the best of the authors' knowledge, this paper is the first to study the relation between state tax policy changes and corporate tax aggressiveness. This paper finds an asymmetrical pattern of corporate tax aggressiveness in response to state tax changes.

Details

Pacific Accounting Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 3 November 2021

Jianrong Wang, Haizhi Wang, Desheng Yin and Yun Zhu

The purpose of this paper is to investigate the role of social capital in the issuances of Rule 144A debt. Using a sample of 1,378 debt offerings from 1997 to 2015 in the…

Abstract

Purpose

The purpose of this paper is to investigate the role of social capital in the issuances of Rule 144A debt. Using a sample of 1,378 debt offerings from 1997 to 2015 in the US, this paper provides empirical evidence on whether and to what extent social capital affects the cost of Rule 144A debt.

Design/methodology/approach

This paper employs a county-level measure of social capital and links social capital to the yield spreads of Rule 144A debt. A Heckman selection model is sued to address the sample selection bias, and an instrumental variable approach and propensity score matching methodology are implemented to deal with the potential endogeneity issue. The authors check for robustness using an alternative measure of social capital.

Findings

The results of the analysis provide evidence that issuers headquartered in the counties with higher levels of social capital experience lower yield spreads in their Rule 144A debt offerings. The findings are robust to a Heckman selection model, an instrumental variable approach and propensity score matching. Furthermore, the analysis reveals the marginal effect of social capital that the effect of social capital is more pronounced for the issuing firms with higher agency cost of debt and lower institutional ownership. The effect of social capital is more prominent after financial crisis.

Originality/value

This paper provides novel evidence of the effect of social capital on the cost of privately placed debt. The issuances of Rule 144A debt are subject to significant information asymmetry and are targeted at sophisticated institutional investors. This paper sheds further light on how institutional investors incorporate the regional social capital in their pricing scheme of private placement of Rule 144A debt.

Details

Managerial Finance, vol. 48 no. 2
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 11 January 2021

Peizhen Jin, Hongyi Wu, Desheng Yin and Yupeng Zhang

Based on the perspective of technology supply chain, this study explores the effect of macroeconomic uncertainty regarding the spatiotemporal evolution of urban innovation…

Abstract

Purpose

Based on the perspective of technology supply chain, this study explores the effect of macroeconomic uncertainty regarding the spatiotemporal evolution of urban innovation networks to establish causality.

Design/methodology/approach

It collects patent trading data for 283 cities in China (2005–2017) and employs the spatial econometric model to investigate the causal relationship.

Findings

The regional transfer of advanced technology in China is rising sharply, and the innovation network based on patent trading is typically high-density, multi-direction and wide-spreading. Further, macroeconomic uncertainty has a negative effect on the scale of innovation flows and the absorptive capacity in eastern cities. However, it has no significant impact on the innovation network characteristics in developed cities. In contrast, macroeconomic uncertainty is detrimental for the absorptive capacity and node importance in inland and undeveloped cities.

Practical implications

As macroeconomic uncertainty increases, it is important to improve the quality of the urban innovation network with a better understanding of heterogeneity to promote further suitability innovation at the region-level.

Originality/value

This study highlights a clear and distinctive view that macroeconomic uncertainty not only directly affects the evolution of the urban innovation network but also indirectly affects the characteristics of other city nodes via the spatial spillover mechanism.

Details

Journal of Enterprise Information Management, vol. 34 no. 1
Type: Research Article
ISSN: 1741-0398

Keywords

Article
Publication date: 15 August 2019

Haizhi Wang, Desheng Yin, Xiaotian Tina Zhang and Xinting Zhen

The purpose of this paper is to empirically investigate universal banks as an important source of external funding and their effects on borrowing firms’ innovation outputs.

Abstract

Purpose

The purpose of this paper is to empirically investigate universal banks as an important source of external funding and their effects on borrowing firms’ innovation outputs.

Design/methodology/approach

The authors employ regression analyses including a difference-in-difference approach and a two-sided matching method to ensure the robustness of the findings. The authors further explore some potential channels and boundary conditions for the main findings.

Findings

The authors find that borrowing from universal banks is negatively associated with the quantity of firm innovation, but not the quality of firm innovation. The authors document that borrowing firms reduce their R&D expenditures and rely more on external partners to produce innovation outputs after loan originations from universal banks. The negative relation between universal bank lending and the quantity of firm innovation is more prominent for unrelated innovation and for financially constrained firms.

Research limitations/implications

The evidence reveals that universal banks may use their informational advantage and market power to limit their corporate borrowers’ investment in innovation activities.

Originality/value

The paper extends the line of research on the source of financing and firm innovation, and establishes a robust relationship between capital market and product market.

Details

Managerial Finance, vol. 45 no. 8
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 7 October 2014

Dawei Jin, Jianghui Liu, Liuling Liu and Desheng Yin

– The purpose of this paper is to investigate the quality of financial reporting by banks in China, and the profit hiding behavior of banks in particular.

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Abstract

Purpose

The purpose of this paper is to investigate the quality of financial reporting by banks in China, and the profit hiding behavior of banks in particular.

Design/methodology/approach

Reported profit is compared with actual profit using multiple regression analysis. The identification strategy allows the authors to quantify the degree of profit hiding in banking institutions.

Findings

Profit hiding exists in the whole banking sector in China regardless of the ownership structure of individual banks, though joint-stock banks have higher degree of profit hiding. Banks that are more financially constrained hide more profit than those less constrained ones. The competition in the banking industry competition impacts the extent of profit hiding, with higher competition being associated with lower degree of profit hiding.

Research limitations/implications

This paper documents the prevailing behavior of profit hiding in Chinese banks. It raises issues regarding the conventional methods of measuring bank efficiencies using accounting information reported by banking institutions.

Originality/value

This paper empirically examines the profit hiding behavior of banks in a transitional country.

Details

Managerial Finance, vol. 40 no. 10
Type: Research Article
ISSN: 0307-4358

Keywords

Book part
Publication date: 12 September 2022

Dawei Jin, Hao Shen, Haizhi Wang and Desheng Yin

This chapter investigates whether and to what extent tax benefits affect the likelihood of firms undertaking leveraged buyout (LBO) transactions.

Abstract

Purpose

This chapter investigates whether and to what extent tax benefits affect the likelihood of firms undertaking leveraged buyout (LBO) transactions.

Design/Methodology/Approach

With an identified sample of LBO firms and similar non-LBO counterparts, this chapter utilizes staggered changes in state corporate income tax rates as exogenous shocks and adopts a Logistic regression to analyze how these tax changes affect firms' probability of engaging in LBOs.

Findings

Firms are more likely to engage in LBOs after increases in corporate income tax rates. Specifically, the increase in the likelihood of firms undertaking LBOs following tax increases is between 6.9% and 12.9%. We also find that this positive relation is more pronounced for firms with higher levels of return on assets (ROA) and marginal tax rates (MTR). Finally, we report that the mean value of tax benefits accounts for between 28.5% and 170% of the premium paid to pre-buyout shareholders.

Originality/Value

This chapter provides strong evidence that tax benefits constitute an important source of value creation in LBOs and adds to the debate regarding the role of tax benefits in LBOs.

Details

Empirical Research in Banking and Corporate Finance
Type: Book
ISBN: 978-1-78973-397-6

Keywords

Article
Publication date: 29 August 2021

Yong Yang, Youqing Fan and Jianfeng Jia

In the face of external paradoxical requirements, the cognitive framework of managers and employees use to perceive, interpret and reconstruct information is important to…

Abstract

Purpose

In the face of external paradoxical requirements, the cognitive framework of managers and employees use to perceive, interpret and reconstruct information is important to ease anxiety and improve job performance. The Yin-Yang balancing of eastern philosophical thought is particularly good at explaining and predicting changes and conflict environments. For this reason, this study aims to propose the eastern construction of the paradoxical cognitive framework based on the Yin-Yang balancing theory and its antecedent framework.

Design/methodology/approach

This paper contrasts the similarity and differences between Chinese and Western philosophy’s thoughts on paradoxes. On this basis, the eastern construction of the paradoxical cognitive framework is proposed. Then, the paper puts forward the antecedent framework of managers’ cognitive framework and employees’ paradoxical cognitive framework.

Findings

This paper proposes the eastern construction of the paradoxical cognitive framework includes the following three dimensions: the unity-in-diversity of paradoxical elements, the asymmetric balance of paradoxical elements and mutual transformation of paradoxical elements. In addition, this paper proposes an antecedent framework of the eastern construction of the paradoxical cognitive framework – the paradoxical requirement of organizational environment exerts a direct impact on managers’ and employees’ paradoxical cognitive framework; managers’ paradoxical cognitive framework has a positive impact on paradoxical leadership; paradoxical leadership exerts an indirect impact on employees’ paradoxical cognitive framework through the collective paradoxical cognitive framework; paradoxical leadership directly affects employees’ paradoxical cognitive framework.

Research limitations/implications

This paper focuses on comparing the similarities and differences of the individual paradoxical cognitive framework in Chinese and Western cultures and proposes the eastern construction of the paradoxical cognitive framework and its antecedent framework. Future research needs to further verify the theoretical framework proposed in this paper.

Originality/value

This paper makes a detailed comparison of the paradox views in Chinese and Western philosophy. It is the first to propose the eastern construction of the paradoxical cognitive framework and its antecedent framework, laying a theoretical foundation for future empirical research.

Details

Chinese Management Studies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1750-614X

Keywords

Article
Publication date: 15 June 2010

Klemen Kavčič and Andrej Bertoncelj

In a global economic environment, companies most likely to succeed should be, at the same time, big and strong as well as small and flexible. The purpose of this paper is…

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Abstract

Purpose

In a global economic environment, companies most likely to succeed should be, at the same time, big and strong as well as small and flexible. The purpose of this paper is to examine the thesis and the concept of strategic risk analysis of processes regarding the size of corporations and individual companies, both at the level of corporations, where they are mainly based on ownership and legal relationships, and also at the level of companies, where they are based on interests and legal relationships.

Design/methodology/approach

The paper examines the strategic orientation of organizations and importance of risk management. The research methodology is based on the analysis of qualitative data collected through surveys. Furthermore, a theoretical framework is introduced based on a study conducted in the transition economy of Slovenia.

Findings

Within this framework, there is a constant trade‐off between market (flexibility) and hierarchy (control). It is important to set an optimal structure of internal and external sourcing to lower the risk exposure of organizations. The paper finds that companies in Slovenia, a transition economy within the European Union, often enter contractual relationships without sufficient strategic long‐term assessments and are thus faced with high risks.

Originality/value

The rational control of complex organizations is enhanced demand for cognitive capabilities of employees and process capabilities of computers. The variety of organizations and contingencies is immense; it is therefore possible to determine only some dimensions and generic solutions. Two possible approaches to simplification are dealt with in the paper. Many statements in this contribution should be treated as hypotheses, to be explored in detail, confirmed or rejected.

Details

Kybernetes, vol. 39 no. 5
Type: Research Article
ISSN: 0368-492X

Keywords

Article
Publication date: 12 October 2012

Yunna Wu, Yong Huang and Wei Luo

The role of a government investment project (GIP) management supervisor is to improve supervision performance and the Chinese government has issued a series of polices…

Abstract

Purpose

The role of a government investment project (GIP) management supervisor is to improve supervision performance and the Chinese government has issued a series of polices, displaying the determination to solve supervision problems. The purpose of this paper is to assist the government to play its role of supervisor and to realize progress supervision performance for GIP in practice with the Agent Construction System (ACS).

Design/methodology/approach

Taking consideration of the essence of ACS, the paper analyzes the system supported theory, which is a supervision mechanism, with contract management as the core and goals as orientation. The authors design the system frame and its composing modules according to the main function of this information system.

Findings

The research builds an expected supervision information system with four functional modules, which is designed according to logical sequence of supervision, based on a theoretical supervision mechanism.

Originality/value

The system is, to the best of the authors' knowledge, the most advanced and practical information system for GIP supervision published in the literature.

Article
Publication date: 12 October 2012

Jernej Belak and Mateja Pevec Rozman

The presence and use of the informal and formal measures of business ethics implementation may be crucial and should therefore be known to managers/owners. Based on the…

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Abstract

Purpose

The presence and use of the informal and formal measures of business ethics implementation may be crucial and should therefore be known to managers/owners. Based on the case study research, this paper aims to suggest that enterprise awareness of importance of business ethics implementation can be of essential meaning for its long‐term existence, success, growth, and development. The purpose of this paper is to discover the presence and use of the informal and formal measures of business ethics implementation and to identify their importance for active measure care by the enterprises.

Design/methodology/approach

In this paper, qualitative research is applied. The research cognitions on informal and formal measures of business ethics implementation are discussed in application of the dialectical systems theory.

Findings

The paper finds that on one side the enterprises' key stakeholders (owners and managers) are aware of the importance of their ethical behaviour as well as of impact of their ethical behaviour to the enterprises' behaviour. The research results also show that enterprises' key stake holders are conscious of the impact of enterprises' ethical behaviour to the enterprises' long term existence, growth, and development. On the other hand, the research findings show that such informal awareness is usually not formalized, which can be argued as a reason for enterprises' unethical behaviour.

Practical implications

This paper gives us some insights as to the state of informal and formal measures of business ethics implementation in Slovenian enterprises. In a frame of practical implications, a further research should be done to show which formal measures of such ethics implementation should be used to stimulate the enterprises' innovative behaviour in assurance of enterprise effectiveness, efficiency, and social responsibility in order to achieve and maintain enterprise's long term existence, growth, and development.

Originality/value

The available literature does not provide for a similar research of linkage between the formal and informal measures of business ethics implementation.

1 – 10 of 16