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Book part
Publication date: 9 December 2020

Zhan Furner, Michaele L. Morrow and Robert C. Ricketts

In this chapter we analyze how the designation of foreign earnings as “permanently reinvested” outside the US (PRE) is related to subsequent firm growth and market returns. Prior…

Abstract

In this chapter we analyze how the designation of foreign earnings as “permanently reinvested” outside the US (PRE) is related to subsequent firm growth and market returns. Prior research suggests that firms that hold excess cash in foreign markets to avoid the US corporate income tax experience lower growth, since such “trapped” cash is inefficiently invested. However, foreign earnings can be inefficiently invested in forms other than cash. We hypothesize and find that as the ratio of PRE to total assets increases, firms' growth rates decline. Our results suggest that trapped earnings, and not just trapped cash, are associated with lower growth. Because PRE have also been associated with earnings management in the literature, we further analyze the association between the use of PRE to meet or beat earnings targets and subsequent growth, observing a significant and persistent negative association. Finally, we note that the market discount for PRE, and especially for the use of PRE to manage earnings, appears to be relatively small. Our results provide support for FASB's stated plans to increase disclosure requirements surrounding the tax accrual.

Article
Publication date: 12 September 2016

Thomas R. Sadler and Shane Sanders

The purpose of this paper is to analyze the 2011 National Basketball Association (NBA) lockout and collective bargaining agreement (CBA).

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Abstract

Purpose

The purpose of this paper is to analyze the 2011 National Basketball Association (NBA) lockout and collective bargaining agreement (CBA).

Design/methodology/approach

Using a bargaining game model, the authors show that asymmetric information via owner revenue shifting and financial non-disclosure caused the conflict between owners and players (growth of player salaries) to result in a lockout.

Findings

The bargaining game also demonstrates the lockout to be a rational response to asymmetric information: by restricting the growth of player salaries, owners improved their competitive position. Other factors motivating the lockout include the indirect benefit to the median owner of repressing player salaries (i.e. greater expected competitive balance) and a principal agency problem within the players’ union. The lockout concluded with a ten-year CBA, a mutual opt-out in 2017, and revenue sharing between 49 and 51 percent of basketball-related income. The league salvaged a shortened 2011-2012 season, but created an economic framework more favorable to owners.

Originality/value

This paper is novel in its analysis of the bargaining aspects of the current NBA collective bargaining agreement.

Details

Managerial Finance, vol. 42 no. 9
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 1 January 1991

J.R. Carby‐Hall

In a previous monograph a discussion took place on stages one and part of stage two of the three stage process in an unfair dismissal action, namely the employee having to show…

Abstract

In a previous monograph a discussion took place on stages one and part of stage two of the three stage process in an unfair dismissal action, namely the employee having to show that he has been dismissed (stage one), and some of the reasons for dismissal which fall within the statutory categories, namely the employee's capability and qualifications; misconduct and redundancy (part of stage two). In this monograph an analysis is proposed on the two remaining reasons, these being the contravention of a duty imposed by an enactment and some other substantial reason. There will then follow a discussion on the test of fairness as constituting the third of the three stage process and on the remedies available when the tribunal finds that the employee has been unfairly dismissed.

Details

Managerial Law, vol. 33 no. 1/2/3
Type: Research Article
ISSN: 0309-0558

Expert briefing
Publication date: 23 December 2021

The lockout followed failure to reach a new collective bargaining agreement (CBA) and pitches a cartel of owners against arguably the most powerful labour union in the United…

Details

DOI: 10.1108/OXAN-DB266289

ISSN: 2633-304X

Keywords

Geographic
Topical
Book part
Publication date: 22 October 2019

B. Anthony Billings, Chansog (Francis) Kim and Cheol Lee

In view of the recent enhanced concerns of the SEC and PCAOB that Accounting Principles Board Opinion No. 23 (APB 23)–asserting firms do not comply with the “sufficient evidence”…

Abstract

In view of the recent enhanced concerns of the SEC and PCAOB that Accounting Principles Board Opinion No. 23 (APB 23)–asserting firms do not comply with the “sufficient evidence” criteria of APB 23, we examine whether APB 23–asserting firms that declared their foreign earnings as permanently reinvested abroad are less likely to repatriate those foreign earnings under the American Jobs Creation Act (AJCA) of 2004, compared with similar non-asserting firms. The asserting firms are required to disclose sufficient evidence that validates an ability to meet their domestic cash needs with only earnings generated in the United States and their plans to indefinitely reinvest foreign earnings outside the United States. Estimates show that asserting firms are more likely to repatriate their foreign earnings than non-asserting firms. In addition, we find that the probability of making an election to repatriate permanently invested foreign earnings under the AJCA of 2004 is higher for firms with nonbinding foreign tax credit (FTC) limitations that have made an APB 23 declaration to permanently invest foreign earnings abroad. These findings suggest that asserting firms’ declarations to indefinitely reinvest foreign earnings abroad are not well grounded, thereby indirectly validating the SEC’s and PCAOB’s increased scrutiny for supporting evidence for APB 23 assertion. The estimates also show that the likelihood of making an election to repatriate foreign earnings under the AJCA of 2004 increases with asserting firms’ liquidity constraints and financial distress: the financial characteristics listed as part of APB 23 criteria of sufficient evidence and highlighted by the SEC and PCAOB comment letters, indicating that asserting firms raid permanently reinvested foreign earnings to satisfy their financial needs and constraints.

Article
Publication date: 16 November 2019

Qi Flora Dong, Yiting Cao, Xin Zhao and Ashutosh Deshmukh

The effect of tax policy on the repatriation of foreign earnings is a topic of ongoing discussion among policymakers, academics, and the popular press. It has become more salient…

Abstract

The effect of tax policy on the repatriation of foreign earnings is a topic of ongoing discussion among policymakers, academics, and the popular press. It has become more salient due to the 2017 Tax Cuts and Jobs Act (TCJA), which permanently removed repatriation tax. This paper synthesizes the academic literature examining US multinational firms’ responses to the repatriation tax holiday initiated by the 2004 American Jobs Creation Act (AJCA), which temporarily reduced the tax on the repatriation of foreign earnings. By synthesizing firm responses to the temporary tax reduction, we identify similarities and differences in: (1) theories about why and when repatriation tax affects firms’ repatriation decisions; (2) empirical evidence of whether repatriation tax affects firms’ repatriation decisions; and (3) empirical evidence of whether repatriation tax affects firms’ investment decisions. The analyses provide insights into the effect of the permanent removal of repatriation tax under the TCJA and explore avenues for future research. This synthesis of the AJCA literature informs tax research and practice as well as policymaking.

Details

Journal of Accounting Literature, vol. 43 no. 1
Type: Research Article
ISSN: 0737-4607

Keywords

Article
Publication date: 1 January 1978

TOM GORE

The Swedish Employers' Federation (SAF), which reached its 75th birthday in September 1977, today operates in a highly developed economy. In 1902 Sweden was relatively a poor…

Abstract

The Swedish Employers' Federation (SAF), which reached its 75th birthday in September 1977, today operates in a highly developed economy. In 1902 Sweden was relatively a poor country, where 55 per cent of the working population was employed in agriculture and forestry, and only 27 per cent in industry and mining. Today, six per cent of the working population is concerned with agriculture and forestry, whilst industry, mining and construction account for 36 per cent. And there are 30 per cent in public administration and other services and fifteen per cent in trade. The rise of this industrial economy in some seventy years has been achieved largely by private enterprise and initiative, inventive genius, the development of foreign trade, and a sound system of industrial relations. Some forty per cent of the industrial production is exported which is equivalent to twenty‐four per cent of the total production of goods and services measured in monetary terms. The recent devaluation of the Krona has been designed to boost exports in order to overcome the balance of payments deficit which has increased considerably in the past year. Sweden, like Britain, has been affected by the slow economic recovery of Europe and other areas in the world.

Details

Industrial and Commercial Training, vol. 10 no. 1
Type: Research Article
ISSN: 0019-7858

Book part
Publication date: 16 June 2023

Andrew Duxbury

I examine patterns of making or deferring strategic repatriations that firms can use to either meet analysts' forecasts or defer to maintain future reported earnings flexibility…

Abstract

I examine patterns of making or deferring strategic repatriations that firms can use to either meet analysts' forecasts or defer to maintain future reported earnings flexibility. First, I examine the extent to which firms repatriate earnings from high foreign tax subsidiaries to decrease US tax expense, resulting in increased net income and lower cash taxes. Using federal tax return information, I find evidence that firms strategically repatriate these earnings to meet or beat current analysts' forecasts. Next, I find evidence that firms that are able to obtain current year tax reductions defer these repatriations in an attempt to build cookie-jar reserves. Lastly, I find that firms do not disclose high foreign tax repatriations (HTRs), even when required by SEC rules. This study contributes to the earnings management, tax avoidance, and disclosure literature by examining a discretionary tax planning strategy.

Article
Publication date: 20 April 2015

Mary Ann Stamsø

The purpose of this paper is to examine the widespread of property sellers choosing to sell by themselves or through an estate agent, what characterises them and the reason for…

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Abstract

Purpose

The purpose of this paper is to examine the widespread of property sellers choosing to sell by themselves or through an estate agent, what characterises them and the reason for their choice. In addition the paper contains comparisons of the gap between sales price and asking price between the sales methods and satisfaction with the sales process. This study is the first study of these phenomena carried out in Norway.

Design/methodology/approach

The data used for this study was obtained from a national survey including 1,649 house sellers. A logistic regression analysis is used to analyse the impact of household’s characteristics on the sales method.

Findings

The main findings of this study are that 83 per cent of the house sellers used an estate agent through the whole sales process and differences in the choices are related to urbanisation, age and education. The most important reason for preferring a real estate broker is that doing the sale on your own is considered too much work. Conversely, the most important reason for doing the sale on your own is that estate agents are too expensive. Those selling without an estate agent were more satisfied and the gap between sales price and asking price was smaller than for those selling through a real estate broker.

Originality/value

Issues concerning competition within the market for estate agents should be central topics for property management. Property sellers selling their property by themselves are an important contribution to increase the competition in the market for estate agents. This issue has not been on the agenda in Norway, or in Europe, in the same way as in the USA. This is probably due to the complexity in the legislation and strict laws within property sales in Central and Southern Europe. However, in Norway, UK and in the Nordic countries, the legal system is not complicated. It is rather the lockout of private individuals from the housing web sites and the fact that the property sellers are not familiar with this kind of transaction that has prevented property sellers to sell their house by themselves. Today Norway is one of few countries with a booming housing market, which also has increased the commission for estate agents. From 2010 private individuals got access to advertise their house on the housing web sites in Norway. These have influenced the focus on alternative sales methods.

Details

Property Management, vol. 33 no. 2
Type: Research Article
ISSN: 0263-7472

Keywords

Article
Publication date: 1 April 1984

Derek Sawbridge, David Bright and Robin Smith

There is little tradition of regional studies in the field of industrial relations. Most of the existing work with a regional flavour is on comparative labour markets. The reason…

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Abstract

There is little tradition of regional studies in the field of industrial relations. Most of the existing work with a regional flavour is on comparative labour markets. The reason for the absence of structural or institutional studies is because of the obvious methodological problem of disaggregating purely regional influences from broader national factors—economic, political, social or legislative.

Details

Employee Relations, vol. 6 no. 4
Type: Research Article
ISSN: 0142-5455

1 – 10 of 91