Search results

Purpose — The chapter assesses the linkages between unreported economic activities and different individualistic and non-individualistic motives as perceived by firm management.Design/methodology/approach — The empirical research is based on a survey of the management of firms operating in the Baltic States. The survey contains information on the perceived extent of unreported activities and on a large number of firm-, sector-, and country-specific factors. A principal component analysis identifies clusters of motives for unreported activity. Regression analyses ascertain the importance of motives individually and as principal components on the extent of unreported activities.Findings — Both individualistic and non-individualistic motives are important for the prevalence of unreported activities. The individualist motives refer to the management being solely profit-oriented and self-interested. Among possible non-individualist motives, measures of government performance and perceptions of reciprocity towards the government appear to play important roles for the extent of unreported activities, but broader societal norms may also play a role.Research limitations/implications — The study considers the perceptions that managers have of unreported activities and other features. These perceptions are subjective and subject to substantial uncertainty. All results should be interpreted in light of the subjective nature of the survey answers.Social implications — Taken literally, the results suggest that stronger government performance is associated with a reduction in unreported activities, at least as perceived by the management. Broader societal developments may also be of importance.Originality/value — The inclusion of variables capturing individualistic as well as non-individualistic motives gives a comprehensive picture of factors behind unreported activities. We employ principal component analysis which allows us to cluster individual survey answers and to produce composite measures of different explanatory factors.

We raise and address an unexamined research question: Why do managers place some business activities in the formal economy and others in the informal? This firm-level managerial choice is most visible in emerging economies and is important due to its performance implications.

We theorize that managers use social ties with formal institutions (e.g. parliament, central bank) to protect against (1) being singled out for enforcement and (2) opportunistic business partners, and that these protections allow managers to conduct more activities in the informal economy. Based on regulatory focus theory, we also submit that managers with a promotion (prevention) focus mindset are more (less) prone to use their social ties with formal institutions to emphasize the informal economy. Hypotheses are tested using survey data from 362 Lebanese top managers.

Managers' social ties with formal institutions relate positively to their propensity to use the informal economy, and managers with a promotion mindset are more willing and those with a prevention mindset are less willing to leverage their social ties with formal institutions to conduct activities in the informal economy.

Our study raises an important new research question at the intersection of strategic and international management and offers an initial answer. Working within the informal economy requires informal social ties among informal actors, but for formally registered firms, entry into the informal economy requires informal ties with formal actors.

Purpose — The aim of this chapter is to explore the relative bounds between the domains of dishonesty and honesty, focusing on the antecedences and consequences of these phenomena.Design/methodology/approach — This conceptual paper discusses the literature on the nature of (dis)honesty in management based on the chapters published in this book but also other management literature.Findings — (Dis)honesty is a complex concept, especially in international management. The chapter brings out two main features of dishonesty. First, dishonest behavior occurs always in result of moral path dependency, and second, both honest and dishonest behaviors seem to be contagious — belonging to our social surrounding, we inevitably mirror others.Originality/value — The complexity of (dis)honesty in management (encompassing its nature, impact factors and consequences) has received relatively little research attention.

The economic life is often hindered by problems that can be successfully solved by tapping into concepts of social sciences. Herein, basic assumptions uniform people’s behavior but these may also create problems and thus, nowadays the economy meets the consequences of the so-called “soft issues” for various reasons. In this light, the aim of the volume is to show what kind of influences may turn out from honesty and dishonesty to management and the economy, in general. These effects generate an ensemble where factors could affect and be affected by each other in several ways.

This research examines how shadow economy affects foreign direct investment (FDI).

The study utilizes a panel dataset including 124 nations between 1997 and 2015. Information on shadow economy, FDI and macro-economic characteristics is obtained from the United Nations Conference on Trade and Development (UNCTAD) and World Bank database. Various econometric methods are employed, such as the panel ordinary least squares (OLS) with fixed-effect estimator and the two-step system generalized method of moments estimation.

The findings of the study illustrate that shadow economy negatively influences total FDI inflows, and this adverse impact is mainly driven by greenfield investments – a component of FDI. Moreover, the authors provide evidence that the shadow economy has more devastating influences on FDI inflows in countries with higher corruption levels and fewer land resources.

Overall, this research suggests an important policy implication that the shadow economy should be controlled more strictly since it harms the FDI inflows, especially greenfield investment.

This research is among the first attempt of evaluating the effect of shadow economy on different FDI types. Furthermore, it examines how the shadow economy–FDI inflows nexus is changed when considering factors including corruption and land resource.

The purpose of this paper is to estimate the Tanzanian shadow economy (SE) from 2003 to 2015 and test the statistical relationships between the SE and its potential causes and indicators.

The econometric analysis is based on a multiple indicators multiple causes (MIMIC) model. To calibrate the SE from the estimates, the authors adopt the value of 55.4 percentage of the SE to official GDP from the literature for the base year 2005.

The SE ranges from 52 to 61 per cent of official GDP and slightly decreases from 2013 to 2015. Increase in inflation, unemployment and government spending were the main drivers of the SE dynamics.

Given the challenges facing estimation of the SE (e.g. small sample size, exogenous estimate to calibrate the model, meaning of the latent variable), quantification of SE should be considered to be rough measures.

To lower the size of the SE, the government needs to keep inflation and unemployment stable over time, to reduce government spending because it creates pressure on tax collection due to the limited tax base.

This is the first study specifically focused on Tanzanian SE based on the MIMIC approach. Existing estimates of Tanzanian SE are calculated by monetary models or apply a common MIMIC specification to the worldwide context.

This study offers a Bourdieu-oriented analysis of the tax compliance practice for indigenous entrepreneurs in New Zealand. It examines the intersection of accounting and tax for Māori entrepreneurs and their relational interactions with the Inland Revenue Department (IRD)/state/Crown and accountants by considering the contextual factors of history, culture and society of Māori.

Qualitative research was adopted using face-to-face in-depth interviews with 34 participants and reviewing government documents. The authors analyse the tax compliance practice by drawing on Bourdieu's concepts of field, capital and habitus to conceptualise the tax field as a site of struggle for power and control by the IRD, accountants and indigenous entrepreneurs.

This study demonstrates how the tax field is structured as a game between tax reporting, taxpaying and monitoring functions. The position within the field is determined by the actor's access to the relevant capitals and habitus. It identifies how accounting, given its centrality to tax compliance, facilitates the power relations between the IRD, accountants and Māori entrepreneurs. The Eurocentric accounting-based tax reporting and the contextual factors illuminate how indigenous entrepreneurs are being dominated in the tax field. They experienced cultural dissonance with conflicting responsibilities when traversing the collectivistic indigenous and tax fields. Their collectivism involves sharing resources as they cherish whanaungatanga (relationship, kinship) and manaakitanga (kindness, generosity), which are at odds and are not valued in the tax field.

It is an empirical illustration of the connection between accounting, tax and power for indigenous taxpayers and their relationship with the IRD/Crown and accountants. It has practical implications for developing and enhancing tax compliance in jurisdictions with indigenous taxpayers. Such an understanding is helpful for policymakers, government, business agencies and the accounting professions when assisting, empowering and educating indigenous groups regarding tax compliance.

This paper responds to the call for accounting research with modern-day indigenous peoples rather than historical ones. The paper fills a gap in the accounting and tax literature by examining the tax compliance practice of indigenous small and medium enterprise (SME) entrepreneurs using Bourdieu's framework. It identifies how the role of accounting creates, maintains and reinforces power structures in the tax field. Tax/accounting reporting based on Eurocentric rules disempowers and alienates indigenous entrepreneurs. They misrecognise their actions in reproducing the existing power structures in the tax field due to deeply held historical and cultural factors about the fear of the Crown/state and their practice of rangitaratanga (esteeming authorities).

This paper aims to offer a general overview of money transfers in Italy and Europe focussing specifically on the migrant community. This is of particular interest because it is in that community where money transfers are most prevalent. This shows the money transfer system as a tool that could guarantee the financial inclusion of migrants but at the same time being used in a distorted and unlawful manner.

After a brief introduction focussed on working principles and legal frameworks, the paper will go deeper in evaluating money transfer data. This data, which comes from various legal authorities, will show the extent to which different migrant communities who reside in Italy are able to carry out illicit activity using money transfers. It will also highlight the existence of legislative inconsistencies through a case by case approach.

This paper shows the reason why people find it relatively easy to use money transfers to launder money or in a broader sense, take part in other illicit financial operations such as financing terrorism.

This study will examine recent Italian criminal cases concerning the unlawful use of money transfers. This paper is the original study of the author and has not been submitted elsewhere for publication.