Search results

The promotion of low tariffs and free trade has been the underlying driver of global economic growth. The recent political developments in the United States and Great Britain calls into question, whether free trade will be supported by the governments of the industrialized world in the future. Shortly after being inaugurated in 2017, the President of the United States has repeatedly announced his plans to impose punitive tariffs on the import of foreign products in order to protect the country’s domestic economy. Besides a controversial border adjustment tax, he has frequently brought up the possibility of imposing a 35% tariff on automobile imports. The chapter aims to analyze the effects of such a tariff on trade in the automotive sector between the United States and Germany as well as on German automobile manufacturers. It takes a quantitative approach to draw a conclusion about the relationship between import tariffs on automobiles and passenger vehicle imports from Germany to the United States utilizing a fixed effects regression model based on panel data. The model finds a significant negative correlation between the examined variables, but even in a worst case scenario, German manufacturers are resilient to the predicted revenue losses caused by a tariff increase.

Numerous empirical studies have been conducted to analyze the impact of board gender diversity (BGD) on firm performance without being able to establish a clear relationship. In this paper, we reassess the relationship between BGD and firm performance by using a quantile regression approach. Our results indicate that BGD matters only across a subset of the firm performance distribution. Moreover, when the possible endogeneity of the relationship between BGD and firm performance is taken into account, there are some conditions under which a positive and significant relationship is observed for the eight lowest quantiles.

We evaluate the performance of financial analysts versus naïve models in making long-term earnings forecasts. Long-term earnings forecasts are generally defined as third-, fourth-, and fifth-year earnings forecasts. We find that for the fourth and fifth years, analysts' forecasts are no more accurate than naïve random walk (RW) forecasts or naïve RW with economic growth forecasts. Furthermore, naïve model forecasts contain a large amount of incremental information over analysts' long-term forecasts in explaining future actual earnings. Tests based on subsamples show that the performance of analysts' long-term forecasts declines relative to naïve model forecasts for firms with high past earnings growth and low analyst coverage. Furthermore, a model that combines a naïve benchmark (last year's earnings) with the analyst long-term earnings growth forecast does not perform better than analysts' forecasts or naïve model forecasts. Our findings suggest that analysts' long-term earnings forecasts should be used with caution by researchers and practitioners. Also, when analysts' earnings forecasts are unavailable, naïve model earnings forecasts may be sufficient for measuring long-term earnings expectations.

Purpose – East European ex-communist countries have now experienced nearly two decades of turbulent economic conditions and challenges resulting from the market transition. Since the early 1990s, there has been considerable decline in unionization throughout the region. This study uses information on union membership provided by four waves of the World Values Survey (WVS) to explain trends in unionization in East European ex-communist countries from 1990 to 2006.

Methodology/approach – We use random-effects and fixed-effects models to test predictions for three sets of explanations for cross-national and historical variation in unionization: industrialization, globalization, and institutions.

Findings – We find a degree of support for all three explanations of union decline. Overall, our analyses reveal the strongest support for industrialization and business cycle explanations. Inflation, unemployment, and urban population growth are all significant factors in shaping patterns of unionization in ex-communist East Europe. Our analyses show that aspects of economic and financial globalization have had significant, negative effects on unionization in the region. Manufacturing imports and foreign direct investment inflows appear to have undermined the position of domestic labor and contributed to declines in union membership.

Originality/value of the chapter – Successor and newly independent unions face the twin challenges of gaining public confidence as representatives of workers' interests, and withstanding increasing market pressures and conditions unfavorable for unionization. We provide evidence that without strong institutions to serve as buffers to external economic conditions, unionization levels in East European ex-communist countries are more open to market forces.

The purpose of the study is to investigate the impact of tax planning activities on the firm value of FTSE 100 firms. We employ static and dynamic panel regression analyses on a sample of 70 companies drawn from the UK FTSE 100 over a five-year period (2006–2010). Empirical evidence suggests that tax planning activity as measured by the proxies based on reported accounting information has a negative impact on firm value. Moreover, the results from the Generalized Methods of Moments (GMM) models suggest significant dynamics in firm value, i.e., the current firm value is positively affected by the past firm value. The findings imply the need for a full review of the adequacy and relevance of tax accounting disclosure and therefore have policy implications for accounting standard setters.

Purpose – This chapter focuses on the family and school influences on the achievement gaps in math and reading by gender, race, and nativity.

Methodology – With the longitudinal data from the National Education Longitudinal Studies, this chapter uses panel data technique to model for the changes of the achievement from the three time points of observation, 8th grade, 10th grade, and 12th grade. This study proposes the concept of “low-level constrained curriculum” to characterize the curriculum structure that leads to the universal low level of course taking among students within the same school.

Findings – The analysis shows that this kind of curriculum structure has the most damaging effect on individual students' math achievement outcomes. For the analysis on parental involvement, the results show that school involvement is more effective than home involvement for math achievement, but not for reading. Domain-specific parental involvement is more important than general parental involvement for both math and reading. These findings have important theoretical and policy implications.

Adoption of digital technology at different levels of economic activity is an important indicator of development. Countries are adopting digital technology at business and government levels to increase efficiency and accountability of service delivery to appropriate user groups. Many countries are using digital technology in banking, education, and many other sectors and recasting the relationship among customers, workers, and employers. The digital transformation progressively changes productivity across all sectors and industries. The empirical investigation shows that mainly the role of per capita income (state of living) and supply-side factors explain cross-country variations in Digital Adoption Index (DAI) in business using a static panel data model with fixed effect (FE) approach for 169 countries over the period 2014–2016. In this context, this study makes an attempt to understand the state of digital adoption in business across 169 countries in 2016 using World Bank data. The empirical results state that only major variable like labour force are positively and statistically significant with DAI across the countries. Although there are caveats that the International Monetary Fund has made about the digital economy, they state that we should think carefully about how to devise policies that will allow us to fully exploit the digital revolution’s benefits while minimizing job dislocation.

The unexpected Eurozone Sovereign Debt Crisis (2010–2012) aroused different attempts of interpretation among analysts and practitioners. While some attributed the crisis to a “contagion” effect of the Subprime Mortgages Financial Crisis in the United States (2007–2009), others saw in it an expression of deeper fundamental economic imbalances.

This chapter presents an evaluation of whether there is convergence or divergence in the sectorial international competitiveness of the Eurozone area countries. A Dynamic Panel Data analysis on country-level exports for all Eurozone members for a period that goes from 1993 to 2014 finds significant evidence of international competitiveness convergence in four- out of 10-export sectors, and no significant evidence of divergence in the rest. While that evidence is not consistent with the high expectations generated by monetary integration more than 15 years ago, those four sectors correspond to high value-added economic activities and, in that sense, indicate a more homogeneous productive modernization process is taking place in the area.

There are growing concerns about the environmental activities of firms and their accountability towards reporting on such activities against the background of the voluntary reporting regimes. As a result, the motivation for this study is to investigate the role of NGOs' (nongovernmental organisations) engagement in influencing firms' environmental accounting disclosures using data of listed firms in Ghana. Environmental disclosure scores were constructed through content analyses from 422 annual reports of the listed firms with NGO engagements surrogated with dummy variables, capturing firms' acknowledgement of their engagements with NGOs and the data analysed using the two-step generalised method of moments. The results provided evidence to show that NGOs' engagement is positive and significantly influence firms' environmental reporting practices. Further analyses confirming profitability, leverage and market share prices among others are significant for explaining environmental disclosures. This is regarded as the first study to investigate the relationship between NGOs as stakeholders and the quality of environmental accounting disclosures. The findings provided comprehensive implications for policies that could further strengthen pressure groups to deal with environmental degradation through firms' activities.

Personnel economics tends be based on single-firm case studies. Here, we examine several internal labor market dimensions of nearly 5,000 firms, over a period of 20 years, using detailed matched employer–employee data from Portugal. In the spirit of Baker, Gibbs, and Holmstrom (1994a, 1994b), we consider worker turnover, the role of job levels and human capital as wage determinants, wage dispersion within job levels, the importance of tenure in promotions and exits, and the scope for careers. We find a large degree of diversity in most of these personnel dimensions across firms. Moreover, some dimensions are shown to be robust predictors of firm performance, even after controlling for time-invariant firm heterogeneity and other variables. These dimensions include low worker churning, the importance of careers, low wage dispersion at low and intermediate job levels, and a tight relationship between human capital variables and wages.