Cross-country Empirical Studies Research Articles

INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS) ADOPTION AND THE VALUE RELEVANCE OF ACCOUNTING INFORMATION IN SELECTED AFRICAN COUNTRIES

The focus of the study was on examining International Financial Reporting Standard (IFRS) Adoption and The Value Relevance of Accounting Information in Selected Africa Countries: A Comparative Analysis of Nigeria and South Africa. The focus on cross country analysis in the subject of IFRS adoption and value relevance is growing quite slowly. However. Cross country empirical studies for countries in Africa continent is largely non-existent or at best difficult to find. This study address this gap by adopting a cross-country approach using Nigeria and South Africa. The study employed a longitudinal research design. The population and the sample of the study comprised the top companies in each country by way of market capitalization for the countries in the study, namely: Nigeria and South Africa as at December, 2019. The convenience sampling technique was used in the study to select listed firms across the two countries. Secondary data sourced from corporate annual reports of the sampled quoted firms got from the Nigerian Exchange Group (NGX) and Johannesburg Stock Exchange (JSE) were used for the study. The study made use of panel data regression and the results revealed that for South-Africa, Earnings Per Share (EPS) and EPS*IFRS were both positive respectively, and also statistically significant. Book Value Per Share (BVPS) and BVPS*IFRS were both positive respectively, and also statistically significant. Dividends Per Share (DPS) and DPS*IFRS were both positive respectively, and were also statistically significant. Intangible Assets (INTA) was not value relevant in the pre-IFRS period given the absence of the statistical significance of the variable, but show some evidence of weak incremental relevance from IFRS adoption as the interaction between INTA*IFRS was significant. Cash Flow Per Share (CFPS) was positive and significant; and furthermore, the interaction of CFPS*IFRS was also positive and statistically significant. For Nigeria, EPS and EPS*IFRS are both positive respectively, with EPS statistically significant. BVPS and BVPS*IFRS are both positive respectively, with only BVPS statistically significant. Furthermore, DPS and DPS*IFRS are both positive respectively, and statistically significant. INTA and INTA*IFRS are both insignificant respectively. Finally, CFPS is positive, though not significant; but the interaction of CFPS*IFRS is positive and significant. It therefore implies that, EPS*IFRS, BVPS*IFRS, DPS*IFRS, INTA*IFRS, CFPS*IFRS shows whether EPS, BVPS, DPS, INTA, CFPS reflects a stronger statistical significance in explaining share price when interacted with IFRS adoption (post) than without it (pre) in the two selected Countries( Nigeria and South Africa) . The study concluded that, there is the need for capital markets in developing countries to become more efficient and for companies and accounting regulatory institutions to ensure timely and quality disclosures of accounting information. It recommended that stock exchanges in developing markets should put a frame-work in place that measure the rate of compliance of each listed firm’s annual report with IFRS demands to enable the sanctioning of firms that recorded below the expected compliance level. The study also recommended amongst others, that financial reporting councils and accounting standards setting bodies globally should support the effort to ensure improved compliance with IFRS as a matter of policy.

Total factor productivity in East Asia under ambiguity

Most cross-country empirical studies on economic growth ignore ambiguity. We argue that ambiguity should matter a priori, given the open-endedness of growth theories. Moreover, ambiguity has received a lot of attention since the great financial crisis (GFC) of 2008, and more recently after COVID-19 and the war in East Europe. Using annual data from the Penn World Table covering 12 East Asian economies from 1954 to 2019, we show that beyond economic factors documented in the current debate about the East Asian miracle, economic agents' confidence shocks about the global economy (one dimension of ambiguity) have a significant negative impact on total factor productivity (TFP) growth. However, correlation uncertainty (another dimension of ambiguity) is low in the region given the persistent high level of connectedness of its productivity network. The empirical results are policy-relevant given that ambiguity, unlike rational expectations, implies that economic agents’ beliefs are not policy invariant.

Carbon Pricing Efficacy: Cross-Country Evidence

To date there has been an absence of cross-country empirical studies on the efficacy of carbon pricing. In this paper we present estimates of the contribution of carbon pricing to reducing national carbon dioxide (CO2) emissions from fuel combustion, using several econometric modelling approaches that control for other key policies and for structural factors that are relevant for emissions. We use data for 142 countries over a period of two decades, 43 of which had a carbon price in place at the national level or below by the end of the study period. We find evidence that the average annual growth rate of CO2 emissions from fuel combustion has been around 2 percentage points lower in countries that have had a carbon price compared to countries without. An additional euro per tonne of CO2 in carbon price is associated with a reduction in the subsequent annual emissions growth rate of approximately 0.3 percentage points, all else equal. While it is impossible to fully control for all relevant influences on emissions growth, our estimates suggest that the emissions trajectories of countries with and without carbon prices tend to diverge over time.

Pronoun drop and prosocial behavior: experimental evidence from Japan

We join a growing body of literature suggesting that the languages people speak influence their decision-making. We tested whether dropping the first-person pronoun “I” affects pro-social behavior in a dictator game-like setting. To this end, we conducted an online randomized, incentivized experiment with a socially representative sample of 2000 Japanese respondents. We provide compelling causal evidence that pronoun dropping reduces pro-sociality. Given that our results provide little empirical support for previous research findings linking first-person pronoun use and lower pro-sociality, we prescribe caution in using languages as a proxy for culture in several cross-country empirical studies in economics.

The plough, gender roles, and corruption

Cross-country empirical studies of corruption using ordinary least squares commonly find that nations in which women play a greater role in economic and public life suffer less corruption. This has been a controversial finding since measures of women’s participation in the economy and politics are likely endogenous. This study uses an aspect of national ancestral geography as a novel instrumental variable in the estimation of the true causal effects of gender upon corruption. It thereby finds that ordinary least squares estimates of the effects of gender upon corruption are biased. This conclusion is upheld in time-series fixed-effects estimation.

A review of the characteristics of corporate and Shariah governance mechanisms and earnings quality

This paper aims to present a review of past literature on Shariah governance's regulatory frameworks, characteristics of mechanisms and relationship with financial reporting quality focusing on earnings quality. This paper specifically examines cross-country empirical studies. The different types of Shariah governance regulatory frameworks in various countries that operate Islamic banking were identified. A synthesis of empirical findings demonstrated that characteristics of corporate and Shariah governance in Islamic banking have been examined in relation to performance, efficiency, risk behaviour and earnings quality. The board of directors (BOD) and Shariah supervisory board (SSB) are the most examined mechanisms. Besides, the measurements of earnings quality have been proxied by discretionary accrual, loan loss provision and earnings loss avoidance. It is concluded that the presence of Shariah governance have impacted the managerial behaviour and quality of financial reporting of Islamic banks.

Hold or sell? How capital gains taxation affects holding decisions

Investments with exit flexibility require decisions regarding both the investment and holding period. Because selling an investment often leads to taxable capital gains, which crucially depend on the duration of an investment, we investigate the impact of capital gains taxation on exit timing under different tax systems. We observed that capital gains taxation delays exit decisions but loses its decision relevance for very long holdings. Often the optimal exit time, which indicates the maximal present value of future cashflows, cannot be determined analytically. However, we identify the breakeven exit time that guarantees present values exceeding those of an immediate sale. While, after-taxes, an immediate sale is often optimal, long holding periods might also be attractive for investors depending on the degree of income and corporate tax integration. A classic corporate tax system often indicates holdings over more than 100 periods. By contrast, a shareholder relief system indicates the earliest breakeven exit time and thus the highest level of exit timing flexibility. Surprisingly, high retention rates are likely to accelerate sales under a classic corporate system. Additionally, the worst exit time, which should be avoided by investors, differs tremendously across tax systems. For an integrated tax system with full imputation, the worst time is reached earlier than under partial or non-integrated systems. These results could help to predict investors’ behavior regarding changes in capital gains taxation and thus are of interest for both investors and tax policymakers. Furthermore, the results emphasize the need to control for the underlying tax system in cross-country empirical studies.

Impact of Capital Gains Taxation on the Holding Period of Investments Under Different Tax Systems

Investments with exit flexibility require decisions regarding both the Investment and holding period. Because selling an investment often leads to taxable capital gains, which crucially depend on the duration of an investment, we investigate the impact of capital gains taxation on exit timing under different tax systems. We observed that capital gains taxation delays exit decisions but loses its decision relevance for very long holdings. Often the optimal exit time, which indicates the maximal present value of future cashflows, cannot be determined analytically. However, we identify the breakeven exit time that guarantees present values exceeding those of an immediate sale. While, after-taxes, an immediate sale is often optimal, long holding periods might also be attractive for investors depending on the degree of income and corporate tax integration. A classic corporate tax system often indicates holdings over more than 100 periods. By contrast, a shareholder relief system indicates the earliest breakeven exit time and thus the highest level of exit timing flexibility. Surprisingly, high retention rates are likely to accelerate sales under a classic corporate system. Additionally, the worst exit time, which should be avoided by investors, differs tremendously across tax systems. For an integrated tax system with full imputation, the worst time is reached earlier than under partial or non-integrated systems. These results could help to predict investors’ behavior regarding changes in capital gains taxation and thus are of interest for both investors and tax policymakers. Furthermore, the results emphasize the need to control for the underlying tax system in cross-country empirical studies.

Образование, рынок труда и социальное поведение молодежи

The interaction between the educational system, labor market, and social behavior of young people, improving compliance of each of the components with one another is one of the most actual scientific and practical problems today. A significant number of the within-country empirical studies as well as cross-country empirical studies appeared in these latter days. However, these studies are focused only on some of the elements of the three-element system, but not on all of them. That is why there is a need to move towards a complex study. In the project initiated by sociologists of the Institute of Sociology of RAS and supported by the Russian Science Foundation such an approach will be implemented. The paper based on generalization of existing statistic data and results of sociological research offers some ideas about this issue. It is noted that the labor market is inextricably linked with educational sphere and social behavior of young people choosing their educational and professional careers. At the same time, it functions very independently from them. Youth get labor market signals with some distortions that disturb young people to orientate themselves at the situation. The educational system is functioning quite autonomously from the labor market and in close connection with the social behavior of young people. Students and their parents became direct consumers of so-called educational services. As a consequence the orientation of the educational institutions becomes stronger to the needs of families (or rather, families’ understanding of their needs). Differentiation in the sphere of education, the existing inequality of getting quality education and other social problems are analyzed. The considerations will form the basis of the research project’s conception.

Does Peacekeeping Work? A Disaggregated Analysis of Deployment and Violence Reduction in the Bosnian War

Cross-country empirical studies have reviewed many aspects of peacekeeping missions, but the findings on their effectiveness diverge. This article draws on recent empirical literature on civil wars using a disaggregated approach, addressing the effectiveness of peacekeeping by examining the local variation in UN troop deployment and violence in the Bosnian civil war. The relationship between the intensity of local violence and troop deployment across Bosnian municipalities and peacekeeping effects on the intensity of subsequent violence are examined with a matching approach. The results indicate that although peacekeeping ‘works’, since it is deployed where the most severe violence takes place, peacekeepers have little effect on subsequent violence. This is consistent with research highlighting the obstacles to UN missions in addressing their objectives.

Local Government Finance: Trends and Questions

Section 1 of this paper suggests that there is little evidence of regional let alone world-wide trends in local finances although trends within particular countries certainly exist. Section 2 then argues that the path-dependent and contextspecific nature of country experiences implies that one must be very careful both in categorizing the local finance systems found in different countries and in making cross-country empirical studies of local finances. Finally, Section 3 suggests that in analyzing and comparing country experiences it is important to be clear about the different (implicit or explicit) normative models to be found in the literature and exemplified in practice in different countries.

Documenting the Brain Drain of “La Crème de la Crème”

Summary Most of the recent literature on the effects of the brain drain on source countries consists of theoretical papers and cross-country empirical studies. In this paper we complement the literature through three case studies on very different regional and professional contexts: the African medical brain drain, the exodus of European researchers to the United States, and the contribution of the Indian diaspora to the rise of the IT sector in India. While the three case studies concern the very upper tail of the skill and education distribution, their effects of source countries are contrasted: clearly negative in the case of the exodus of European researchers, clearly positive in the case of the Indian diaspora’s contribution to putting India on the IT global map, and mixed in the case of the medical brain drain out of Africa.

Social Transfers and Growth: A Review

A considerable and growing literature exists on social transfers in developing countries, that is, direct transfers in cash or kind to individuals or households in poverty. Many studies have examined the contribution social transfers can make to reducing poverty and vulnerability in the developing world, but less attention has been paid to how social transfers might affect growth. This review examines the available evidence on the effects social transfers may be expected to have on growth at the micro-level. It identifies and assesses a number of pathways through which social transfers can potentially contribute either to enhancing or impeding growth. This paper argues that in assessing the growth impacts of social transfers, it is important to focus on the poor and their circumstances. The discussion of the linkages between social transfers and growth in developed countries focuses on cross-country empirical studies, testing the hypothesis that if social expenditures are harmful to growth performance then they will show a negative correlation with growth across a sample of countries.

Bankruptcy Policy, Legal Heritage, and Financial Development: An Agenda for Further Research

What does corporate bankruptcy law aim to achieve and how should it achieve its aim? In this paper, I comprehensively review and analyze the theoretical debate and the existing empirical evidence that aspire to answer these two questions. I study what various country-specific and cross-country empirical studies have shown, and what they have failed to prove so far. By highlighting the findings and methodological limitations of these studies, I formulate a research agenda whose final purpose is to provide a decisive answer to the debate on what are, or should be, the goals and means of bankruptcy law.

Social Transfers and Growth: A Review

A considerable and growing literature exists on social transfers in developing countries, that is, direct transfers in cash or kind to individuals or households in poverty. Many studies have examined the contribution social transfers can make to reducing poverty and vulnerability in the developing world, but less attention has been paid to how social transfers might affect growth. This Review examines the available evidence on the effects social transfers may be expected to have on growth at the micro-level. It identifies and assesses a number of pathways through which social transfers can potentially contribute either to enhancing or impeding growth. This paper argues that in assessing the growth impacts of social transfers it is important to focus on the poor and their circumstances. The discussion of the linkages between social transfers and growth in developed countries focuses on cross-country empirical studies, testing the hypothesis that if social expenditures are harmful to growth performance then they will show a negative correlation with growth across a sample of countries.

Cross-Country Empirical Studies of Systemic Bank Distress: A Survey

A rapidly growing empirical literature is studying the causes and consequences of bank fragility in contemporary economies. The paper reviews the two basic methodologies adopted in cross-country empirical studies, the signals approach and the multivariate probability model, and their application to study the determinants of banking crises. The use of these models to provide early warnings for crises is also reviewed, as are studies of the economic effects of banking crises and of the policies to forestall them. The paper concludes by identifying directions for future research.

Cross-Country Empirical Studies of Systemic Bank Distress: A Survey

A rapidly growing empirical literature is studying the causes and consequences of bank fragility in present-day economies. The paper reviews the two basic methodologies adopted in cross-country empirical studies-the signals approach and the multivariate probability model-and their application to studying the determinants of banking crises. The use of these models to provide early warnings for crises is also reviewed, as are studies of the economic effects of banking crises and of the policies to forestall them. The paper concludes by identifying directions for future research.

Cross-Country Empirical Studies of Systemic Bank Distress: A Survey

Cross-Country Empirical Studies of Systemic Bank Distress: A Survey

Sustained Macroeconomic Reforms, Tepid Growth: A Governance Puzzle in Bolivia?

We are increasingly cognizant of the limits to large cross-country empirical studies in trying to understand in-depth a particular country reality, in ways useful for advice. At the same time, merely relying on a single country account at a particular point in time ignores the historical and comparative cross-country perspective. Worse, an in-depth investigation of a single issue within a country begs the question of whether such particular issue may be fundamental for the country's growth and development relative to other determinants, or not. Further, drawbacks exist from excessive reliance on narrow empirical approaches, or on mere qualitative narrative. Consequently, the approach undertaken here for the case of Bolivia is of an integrated nature, combining the following strands: i) an historical perspective from the twin standpoints of the evolution of the enterprise and government sectors over the past half century; ii) an in-depth review of the literature on explanations of Bolivia's performance; iii) an empirical analysis of the country's enterprise sector performance on the basis of a detailed firm-level survey conducted recently in 80 countries, and, iv) an empirical analysis of Bolivia's public agencies based on a survey of public officials in Bolivia working in over 100 institutions. To provide an additional element of comparability, we also utilize cross-country governance indicators.

Barro's fertility equations: the robustness of the role of female education and income

Barro and Lee (1994) and Barro and Sala-i-Martin (1995) find that real per-capita GDP and both male and female education have important effects on fertility in their cross-country empirical studies. In order to assess the robustness of their results, their estimated models are subjected to specification and diagnostic testing, the effects on the model of using the improved Barro and Lee (1996) cross-country data on educational attainment of the population aged 15 and over are examined, and the different specifications used by Barro and Lee and by Barro and Sala-i-Martin compared. The results obtained suggest that their fertility equations do not perform well in terms of diagnostic testing, and are very sensitive to the use of different vintages of the educational attainment proxies and of the Summers-Heston cross-country income data. A robust explanation of fertility, to link with empirical growth equations, has, therefore, not yet been found; further work is required in this area.