Search results

1 – 10 of over 82000
To view the access options for this content please click here
Article
Publication date: 14 April 2014

Don Bruce, John Deskins and Tami Gurley-Calvez

When a small business purchases a capital asset, its cost for tax purposes is spread over the useful life of the asset through the process of depreciation. It has become…

Abstract

Purpose

When a small business purchases a capital asset, its cost for tax purposes is spread over the useful life of the asset through the process of depreciation. It has become common in the USA for policy makers to enhance depreciation rules in an effort to increase business investment in a less-costly manner than across-the-board marginal tax rate cuts. Indeed, short-term depreciation policies are often billed by policy makers as a way to save America's small businesses. However, little is known about the actual effects of depreciation policies on small business activity. This paper aims to discuss these issues.

Design/methodology/approach

In this initial attempt to test the political claims regarding the importance of depreciation rules, the paper uses a 12-year panel of tax returns for Schedule C sole proprietors to empirically examine whether more generous depreciation policies influence small business activity at the extensive margin. Specifically, the paper estimates a series of multivariate models to explain sole proprietors’ decisions to remain in business as functions of their financial, demographic, and tax situations, including measures of the present discounted value (PDV) of a stream of tax deductions for depreciated capital under various rule structures.

Findings

Throughout the analysis, the authors are unable to find evidence that favorable depreciation rules lead to greater rates of entrepreneurial longevity among Schedule C sole proprietors.

Originality/value

Discrete choice results suggest that increases in the PDV of tax reductions from depreciation (e.g. depreciating the value earlier in the recovery period) might actually lead to higher probabilities of small business exit, while survival analysis finds no clear influence of depreciation on spells of small business activity.

Details

Journal of Entrepreneurship and Public Policy, vol. 3 no. 1
Type: Research Article
ISSN: 2045-2101

Keywords

To view the access options for this content please click here
Article
Publication date: 5 September 2017

Anna Motylska-Kuzma

The purpose of this paper is to examine the status, trends and potential future research areas in the field of financial decision-making process in family firms.

Abstract

Purpose

The purpose of this paper is to examine the status, trends and potential future research areas in the field of financial decision-making process in family firms.

Design/methodology/approach

The bibliometric indicators and methods are applied in order to describe the publication activity and to analyze the contents of the articles. The material examined are the journals included in the SCOPUS, SAGE and EBSCO database and the peer-reviewed article, which contain in their titles, keywords or abstracts with a combination of phrases “family firms,” “family business” or “family enterprise” with “financial decision” or one of the subcategories: capital structure, investment decision, capital budgeting, working capital management or dividend policy. The study covers the period from 2000 to 2016.

Findings

Although the interest in family business research is growing rapidly, the area of financial decision making is underestimated. Despite of the fact that the vast majority of the studies into financial decisions in family firms is are focused on the capital structure, they do not give clear answers to the question of how the family businesses behave in this scope and what their true financial logic is. Additionally, the area of the investment decisions and dividend policy is rather not better left uncovered.

Research limitations/implications

The analyses enable the identification of potential avenues for future research which could be vital to make an advancement in the consolidation of the discipline.

Practical implications

The analyses ought to have a potential meaning mainly for external institutions (especially financial institutions) in better understanding of the family businesses and their point of view.

Originality/value

This paper fulfills the need of a comprehensive review of financial decision making process in family firms. It provides a literature review and bibliography for the period between 2000 and 2016 for the use of both academicians and practitioners.

Details

Journal of Family Business Management, vol. 7 no. 3
Type: Research Article
ISSN: 2043-6238

Keywords

To view the access options for this content please click here
Article
Publication date: 18 April 2018

Leonard Polzin, Christopher A. Wolf and J. Roy Black

The purpose of this paper is to examine the use of accelerated depreciation deductions, which includes Section 179 and bonus depreciation, taken in the first year of asset…

Abstract

Purpose

The purpose of this paper is to examine the use of accelerated depreciation deductions, which includes Section 179 and bonus depreciation, taken in the first year of asset life by Michigan farms. The frequency, value and influence of accelerated depreciation on farm investment are also analyzed.

Design/methodology/approach

Accrual adjusted income statements, balance sheets, depreciation schedules, and income tax information for 66 Michigan farms from 2004 to 2014 provide data for the analysis. The present value of the accelerated deduction and change in the cost of capital were calculated. Finally, investment elasticities were used to arrive at the change in investment due to accelerated depreciation.

Findings

Accelerated depreciation was utilized across all applicable asset classes. Section 179 was used more often than bonus depreciation in part because it was available in all the examined years. Based on actual farm business use, accelerated depreciation lowered the cost of capital for the operations resulting in an estimated increase in investment of 0.27 to 11.6 percent depending on asset class.

Originality/value

The data utilized are of a detail not available in previous investigations which used either aggregate data or estimated rather than the observed use of accelerated depreciation. This analysis reveals that accelerated depreciation as used by commercial farms lowers the cost of capital and thus encourages investment particularly in machinery and equipment.

Details

Agricultural Finance Review, vol. 78 no. 3
Type: Research Article
ISSN: 0002-1466

Keywords

To view the access options for this content please click here
Book part
Publication date: 14 May 2018

D. Kirk Davidson, Kanji Tanimoto, Laura Gyung Jun, Shallini Taneja, Pawan K. Taneja and Juelin Yin

The origins of corporate social responsibility (CSR) have been widely attributed to the work of scholars, and business managers as well, in North America and Western…

Abstract

The origins of corporate social responsibility (CSR) have been widely attributed to the work of scholars, and business managers as well, in North America and Western Europe. Inevitably, however, as the economic interaction of individual firms and entire nations has grown over the past several decades — call it globalization — so too has the concept and the practice of CSR spread throughout the world. It is certainly time to explore how CSR is being incorporated into the practice of business management in other regions and other countries. Therefore, in this chapter we will focus on Asia: specifically on Japan, South Korea, India, and China. It is interesting for academicians to understand how CSR is being absorbed and adapted into the business cultures of these four countries. Perhaps of even greater importance, it is vital that business managers know what to expect about the interaction between business and society as well as the government as their commercial activities grow in this burgeoning part of the world.

For each of these four countries, we will provide an overview of the extent to which CSR has become a part of the academic community and also how it is being practiced and incorporated in everyday management affairs. We will see that there are very significant differences among these countries which lead to the natural question: why? To answer this question, we will use an eight-part analytical framework developed specifically for this purpose. We will look at the history, the dominant religious beliefs, the relevant social customs, the geography, the political structures, the level of economic development, civil society institutions, and the “safety net” of each country. As a result of this analysis, we believe, academicians can learn how CSR is absorbed and spread into commercial affairs, and managers can profit from learning more about what to expect when doing business in this increasingly important region.

To view the access options for this content please click here
Article
Publication date: 9 February 2010

Jane L. Menzies and Stuart Orr

The purpose of this paper is to test a model of cooperation between internationalising businesses and local and host country governments in the context of Australian…

Abstract

Purpose

The purpose of this paper is to test a model of cooperation between internationalising businesses and local and host country governments in the context of Australian companies internationalising to China.

Design/methodology/approach

The paper presents a model for the political dimensions of internationalising based on corporate political theory and the cooperative view of management. Data were collected from personal interviews with representatives from 40 Australian organisations with businesses or operations in China. The data were analysed using NVivo.

Findings

Assistance provided by the Australian government was often sought and was perceived to be beneficial. Most participants experienced policies and regulations which affected their entry modes. In ten cases they acted as barriers and significantly influenced entry mode choice. The majority of participants viewed the development of relationships with the Chinese government as important and employed a variety of relationship behaviours. Over half of the participants identified the need to understand and deal with the psychically distant government structures of the Chinese government, namely government intervention in business.

Practical implications

The model links the organisational objectives of businesses internationalising to China, understanding the political/regulatory environment, selecting an entry mode and developing/maintaining a successful business. To achieve these objectives corporate political behaviour must reflect the sovereign powers in place at the time.

Originality/value

The paper presents a model which develops the literature for the political dimensions of internationalisation. It also presents empirical data on the political dimensions of internationalising into China. These findings will assist businesses in understanding political factors when internationalising to China.

Details

Journal of Chinese Economic and Foreign Trade Studies, vol. 3 no. 1
Type: Research Article
ISSN: 1754-4408

Keywords

To view the access options for this content please click here
Article
Publication date: 5 April 2011

Franck Bancel and Usha R. Mittoo

The purpose of this study is to gain some insights into how managers perceive and achieve financial flexibility and its value in coping with the 2008 global financial…

Abstract

Purpose

The purpose of this study is to gain some insights into how managers perceive and achieve financial flexibility and its value in coping with the 2008 global financial crisis. The study focuses on the following questions: What are the sources and measures of financial flexibility? Do financially flexible firms suffer a lower impact from the crisis? Is financial flexibility related to business flexibility? and Is financial flexibility important for the firm's capital structure decision?

Design/methodology/approach

This paper employs two methods: a questionnaire survey and interviews with chief financial officers (CFOs). The results are used to examine the relation between the firm's financial flexibility level and the impact of the global financial crisis on its liquidity, investments, capital structure and business operations. The results are used to analyze the robustness of different financial flexibility measures constructed from the survey data to identify an appropriate financial flexibility measure.

Findings

The main finding is that firms with high financial flexibility suffer lower impact from the crisis. The results show that firms with greater internal financing are likely to have lower leverage, higher cash ratios, and suffer a lower impact from the crisis on their business operations. The analysis indicates that an index based on the firm's leverage, liquidity, and operating ratios, similar to the Altman Z‐score, might be a better financial flexibility measure than long‐term debt ratio. The evidence also suggests that financial flexibility is a part of the firm's business strategy and is important for its capital structure decisions.

Originality/value

A major challenge for researchers is how to measure the firm's financial flexibility level, as it is unobservable and difficult to quantify. The innovation of this paper is to directly ask managers about the firm's financial flexibility, from both internal and external financing, construct several financial flexibility variables based on the survey data, and examine their correlations with the global financial crisis impact, to identify a robust financial flexibility measure. The research also provides unique data to investigate the value of financial flexibility during a severe credit crisis.

Details

International Journal of Managerial Finance, vol. 7 no. 2
Type: Research Article
ISSN: 1743-9132

Keywords

To view the access options for this content please click here
Article
Publication date: 1 March 2001

Lawrence J. Abbott

Summarizes previous research on the impact of the investment opportunity set (IOS) on firm financing, dividend and compensation policies, develops hypotheses on the…

Abstract

Summarizes previous research on the impact of the investment opportunity set (IOS) on firm financing, dividend and compensation policies, develops hypotheses on the effects of IOS changes on these three areas and tests them using 1980‐1989 data from a sample of US firms moving high and low IOS rankings (and vice versa) plus a control (stable) group. Explains the sample selection method and shows that most declining IOS firms were small, high‐tech firms; firms dealing in food and consumer products showed increasing IOS; and control firms were mostly from capital intensive industries. Finds that rising IOS firms generally reduced their dividends and market debt‐to‐equity ratio. Adds that all three groups increased their use of stock option plans but this was only significant for the IOS rising firms. Briefly comments on the underlying reasons for the findings and their implications for further research.

Details

Managerial Finance, vol. 27 no. 3
Type: Research Article
ISSN: 0307-4358

Keywords

To view the access options for this content please click here

Abstract

In this paper we use a large linked employer-employee data set on German establishments between 1993 and 2012 to investigate how the gender composition of the top layer of management affects a variety of establishment and worker outcomes. We use two different measures to identify the gender composition of the top layer based on direct survey data: the fraction of women among top managers, and the fraction of women among working proprietors. We document the following facts: (a) There is a strong negative association between the fraction of women in the top layer of management and several establishment outcomes, among them business volume, investment, total wage bill per worker, total employment, and turnover; (b) Establishments with a high fraction of women in the top layer of management are more likely to implement female-friendly policies, such as providing childcare facilities or promoting and mentoring female junior staff; (c) The fraction of women in the top layer of management is also negatively associated with employment and wages, both male and female, full-time and part-time. However, all of these associations vanish when we include establishment fixed effects and establishment-specific time trends. This reveals a substantial sorting of female managers across establishments: small and less productive establishments that invest less, pay their employees lower wages, but are more female-friendly are more likely to be led by women.

Details

Gender Convergence in the Labor Market
Type: Book
ISBN: 978-1-78441-456-6

Keywords

To view the access options for this content please click here
Article
Publication date: 3 April 2009

Dylan Sutherland

This paper aims to explore the contribution of China's largest business groups to China's outward foreign direct investment (OFDI), looking particularly at the question of…

Abstract

Purpose

This paper aims to explore the contribution of China's largest business groups to China's outward foreign direct investment (OFDI), looking particularly at the question of whether they contribute to strategic‐asset‐seeking OFDI.

Design/methodology/approach

It uses national‐level data and business group OFDI data to explore the sectors from which OFDI originates and destinations to which it is sent. From this conclusions are drawn as to the types of investments being made.

Findings

In the national context strategic‐asset‐seeking OFDI from China has been rather limited to date. Instead, OFDI expansion still appears more closely linked to China's expansion as a trading nation with a natural resource deficit. Strategic‐asset‐seeking OFDI when it does take place, moreover, is orchestrated to a large extent through large state controlled business groups, as is much other OFDI.

Research limitations/implications

A limitation of this research is the reliance on official data and the assumed simplification that most strategic‐asset‐seeking OFDI is concentrated in the manufacturing industries.

Practical implications

More attention should be paid to the role of these select business groups as they play a significant part in China's OFDI.

Originality/value

There is a growing presumption that much of China's OFDI is strategic‐asset‐seeking in nature and that new theories are required to explain this trend. Many firm‐level studies, however, rely upon just a few high‐profile but unrepresentative cases. This paper redresses this imbalance. It also shows that China's largest trial business groups have played an important role in her OFDI to date.

Details

Chinese Management Studies, vol. 3 no. 1
Type: Research Article
ISSN: 1750-614X

Keywords

To view the access options for this content please click here
Article
Publication date: 1 March 2001

Stewart Jones and Rohit Sharma

Summarizes previous research on the investment opportunity set (IOS) using price‐based and investment‐based proxies and variance measures; and develops hypotheses on the…

Abstract

Summarizes previous research on the investment opportunity set (IOS) using price‐based and investment‐based proxies and variance measures; and develops hypotheses on the relationship between IOS, debt/equity ratios and dividend policies. Tests them on 1990‐1998 data from listed Australian companies and explains the methodology, which builds on Gover and Gover (1993) by including more recent proxy variables. Finds no significant results from low growth firms, although some high growth firms show lower debt/equity ratios and dividends. Questions the robustness of existing IOS proxies in the Australian context and calls for further research.

Details

Managerial Finance, vol. 27 no. 3
Type: Research Article
ISSN: 0307-4358

Keywords

1 – 10 of over 82000