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Article
Publication date: 8 May 2017

Dimitrios V. Kousenidis

This paper aims to examine whether the release of news about policy interventions by the troika [European Union (EU)/the European Central Bank (ECB)/International Monetary…

Abstract

Purpose

This paper aims to examine whether the release of news about policy interventions by the troika [European Union (EU)/the European Central Bank (ECB)/International Monetary Fund (IMF)] in the crisis-affected EU countries (Cyprus, Greece, Ireland, Italy, Portugal and Spain) and whether the policy responses of these countries’ governments had impacts on the return and risk of stocks in the financial and real-economy sectors of these countries.

Design/methodology/approach

The paper uses a broad set of news announcements concerning the troika authorities’ policy interventions and the policy responses of the affected Eurozone states’ governments. To test for the risk and return effects of these announcements during the crisis period, a set of regression equations is estimated under a difference-in-difference approach using intercept and slope dummy variables for news releases from troika authorities and from the national governments of the six EU countries. This enables unraveling the effects of the crisis (first difference) and the effects of news announcements (second difference).

Findings

The results indicate that the involvement of the troika managed to reverse some of the unfavourable market effects of the crisis. Moreover, the policy response of national governments was found to have stronger favourable effects in the markets of the affected countries implying that investors likely waited for the response of the national governments before they reacted to the policy actions of the troika. The simultaneous release of news from the troika and from national governments had adverse effects on the returns and risk of the firms in the real economy sectors, suggesting that cross-news announcements conveyed negative information in the markets.

Originality/value

The paper provides evidence on the effects of policy-related news announcements on the development of the recent sovereign debt crisis in Europe. This issue is highly important, as it can reveal the effectiveness of the IMF’s and EU authorities’ policy interventions in affected Eurozone member states during the first major crisis in Europe since the monetary union.

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Article
Publication date: 9 April 2018

Sandra Cohen and Sotirios Karatzimas

The purpose of this paper is to explore the role of the Troika’s advent played in the progress of the budgeting and the financial reporting systems reform at the Greek…

Abstract

Purpose

The purpose of this paper is to explore the role of the Troika’s advent played in the progress of the budgeting and the financial reporting systems reform at the Greek central government level.

Design/methodology/approach

The approach of an extreme country case study is adopted. The data used in the paper have been identified through document analysis performed on the relevant documents produced by the Troika, the Greek Ministry of Finance, and other relevant sources. The reform process is seen through the lens of the neo-institutional theory and the resource dependency theory.

Findings

Although both reforms targeted the introduction of best international practices – particularly useful in periods of financial distress and scarce resources – the advent of the Troika affected their progress and changed the priorities. As a result, the reform was redirected toward strengthening the cash budgeting system.

Research limitations/implications

The study is subject to the limitations of an extreme case study research.

Practical implications

This is a case where resource dependency changes political priorities and directions and affects the evolvement of state budget and accounting reforms under way.

Originality/value

The role of external fund providers in public sector financial management reform priority-setting, in the case of a developed Eurozone country, is analyzed. The study contributes to the research agenda on accounting practices in times of austerity.

Details

International Journal of Public Sector Management, vol. 31 no. 3
Type: Research Article
ISSN: 0951-3558

Keywords

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Article
Publication date: 11 March 2020

Maria Elisabete Neves, Zélia Serrasqueiro, António Dias and Cristina Hermano

This paper aims to analyse the Portuguese companies’ determinants of capital structure. To reach this objective, the authors used data from 37 non-financial Portuguese…

Abstract

Purpose

This paper aims to analyse the Portuguese companies’ determinants of capital structure. To reach this objective, the authors used data from 37 non-financial Portuguese large enterprises and from 4,233 non-financial small and medium enterprises for the period 2010-2016. Additionally, the authors selected a sub-period from 2010 to 2014 for a deeper understanding of the impact of the sovereign debt crisis and the Economic Adjustment Programme of Troika on the capital structure of those companies.

Design/methodology/approach

Three dependent variables were tested according to debt maturity, and a dynamic panel data model, namely, the generalised method of moments system estimator, was used to test the formulated research hypotheses following Arellano and Bover (1995) and Blundell and Bond (1998) to capture the dynamic nature of the firm’s capital structure decisions.

Findings

In general, the results point out that the capital structure decisions depend on a set of firm-specific factors, and that the effects of the determinants of the debt maturity ratios differ according to the type of firm, i.e. large/small firms, and the economic cycle.

Originality/value

To the best of the authors’ knowledge, this is the first study that has been carried out in Portugal by using two samples of large and small companies for analysing the effects of the Economic Adjustment Programme of Troika on the capital structure of companies. The authors seek to understand which type of companies suffered more because of the effects of the Economic Adjustment Programme of Troika during this period, and which are the capital structure determinants that present greater change. Contrary to what might be expected, large companies are the firms that suffer most from the Economic Adjustment Programme. Probably, because these companies are the most immediate, most scrutinised and those that must show abroad that the bank did not fund them in the long term, because of the imposition and limits to grant credit faced by the banks themselves.

Details

International Journal of Accounting & Information Management, vol. 28 no. 3
Type: Research Article
ISSN: 1834-7649

Keywords

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Article
Publication date: 17 August 2015

Enrico Bracci, Christopher Humphrey, Jodie Moll and Ileana Steccolini

The era of austerity that has followed the outbreak of the global financial crisis has posed a myriad of challenges for public services, with demands for major cuts in…

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Abstract

Purpose

The era of austerity that has followed the outbreak of the global financial crisis has posed a myriad of challenges for public services, with demands for major cuts in government spending, the delivery of balanced budgets and zstrategies for deficit reduction. The purpose of this paper is to consider how public sector accounting and accountability systems are implicated in the development and implementation of austerity policies. Also, it pinpoints a range of issues that accounting researchers need to be contemplating on the subject of accounting for austerity.

Design/methodology/approach

Interdisciplinary literature review, coupled with an illustrative discussion of the changing nature of public sector accounting practices under austerity.

Findings

Despite the significance and scale of austerity, public sector accounting research on the topic is in its infancy, with the prominent focus being on how accounting technologies are used to manage austerity. There have been few attempts to debate critically the construction of austerity and to provide alternative accounts of austerity. Accounting for austerity, especially in terms of its implications and consequences, is far too complex and challenging to be categorized as simply seeking to “balance the books”.

Research limitations/implications

As an academic community, we need to be developing understanding of public sector accounting research under austerity across different organizational levels and contexts. Also, we should be framing the accounts of austerity in ways that respect and build on a sound understanding of the extensive available interdisciplinary research on this topic. Key research questions to address include: how is accounting shaping constructions of, and impressions, attitudes and behaviors toward, austerity and the status of governments and public service organizations? What do such patterns of development mean for the roles and contributions of public sector accountants under austerity? Are accounting systems destined to be used primarily as vehicles for cost-cutting, or can they be used as engines for growth and for thinking about public service responsibilities in more socially inclusive forms?

Originality/value

Accountings of austerity in the field of public sector accounting research have been worryingly limited. This paper and the papers in this special issue of AAAJ address such failings, revealing a range of critical implications and challenges of austerity policies for public sector accounting research.

Details

Accounting, Auditing & Accountability Journal, vol. 28 no. 6
Type: Research Article
ISSN: 0951-3574

Keywords

Abstract

Details

Journalism and Austerity
Type: Book
ISBN: 978-1-83909-417-0

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Book part
Publication date: 23 October 2017

Tiago Cardao-Pito

In the euro’s initial years, Greece, Ireland, Italy, Portugal and Spain observed capital flow bonanzas and credit-booms, two cycles known to precede banking crises…

Abstract

In the euro’s initial years, Greece, Ireland, Italy, Portugal and Spain observed capital flow bonanzas and credit-booms, two cycles known to precede banking crises. Domestic banks fuelled those cycles via funding obtained from foreign financial institutions. Yet, these countries’ banking and financial crises have unfolded in different modes. In Ireland and Spain, credit-booms propelled real-estate bubbles, which dragged banks into crises, with governments’ accounts later being affected when rescuing banks (Spanish regional banks, and all Irish major banks). In Greece and Italy, extra monetary means perpetuated government imbalances (e.g. debt levels above 100% of GDP, large yearly deficits). More severely in Greece, banks were brought into crises by sovereign crises. In Portugal, a mixture of private and public sector–led crises have occurred. Our comparative study finds that these crises: (1) are connected to shocks and imbalances caused by dangerous banking sector cycles during the monetary integration process; (2) were not mere expansions of the US subprime crisis; (3) were not only caused by country-specific features and institutions; and (4) followed distinct paths, therefore, a uniform model encompassing all post-euro crises cannot exist.

Details

Economic Imbalances and Institutional Changes to the Euro and the European Union
Type: Book
ISBN: 978-1-78714-510-8

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Abstract

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The Development of Socialism, Social Democracy and Communism
Type: Book
ISBN: 978-1-78743-373-1

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Article
Publication date: 5 May 2021

Sandra Cohen and Sotirios Karatzimas

Greece had to undertake several reforms under intense policy conditionality pressures – stemming from the three financial support programs agreed between the Greek…

Abstract

Purpose

Greece had to undertake several reforms under intense policy conditionality pressures – stemming from the three financial support programs agreed between the Greek Government and the Troika – and political instability. Within this context, this study aims to analyze the role of politicians and technical assistance staff in the administrative reform of the Greek state budget.

Design/methodology/approach

The study adopts the approach of an extreme country-case study which is analyzed through a theoretical framework with insights from the resource dependency theory and the concept of policy conditionality. The theoretical framework is supported by documents of the International Monetary Fund and the European Commission, including the technical Memoranda of Understanding (MoUs) and their progress reports and is informed by the outcome of interviews with General Accounting Office executives.

Findings

While the budget reform eventually met the MoU requirements, the frequent changes at the government level, the constant renegotiations with the Troika that initiated changes to the plan and the instability of the technical assistance teams formed to support the reform contributed to important implementation delays.

Originality/value

The study contributes to the research agenda on accounting reforms during periods of financial crises by providing evidence on the role of politicians’ level of ownership and technical assistance staff contribution.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

Keywords

Abstract

Details

Environmental Security in Greece
Type: Book
ISBN: 978-1-80071-360-4

Abstract

Details

Journalism and Austerity
Type: Book
ISBN: 978-1-83909-417-0

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