This research analyses the convenience and consequences of the ANECA criteria for the assessment ... more This research analyses the convenience and consequences of the ANECA criteria for the assessment of the research performed by accounting academics in Spain. We focus on the level for the accreditation of catedrático de universidad, and the publication patterns and possibilities of the accounting scholars in Spain. We find that they have more difficulties for publication than their counterparts in adjacent fields of knowledge. Most of the accounting academics affiliated to Spanish institutions than have succeeded in publishing in the top international accounting journals co-authored their articles with foreign authors, mainly affiliated to USA or UK institutions, and/or focused their research on international setting and topics. The Spanish regulation for accreditation stresses this pattern. This situation may have serious consequences for the survival of the accounting discipline in Spain and for the research on topics focused on Spanish problems. Este trabajo analiza la convenienci...
International Journal of Occupational Safety and Ergonomics
This paper performs an empirical research and finds a negative relationship between accidents in ... more This paper performs an empirical research and finds a negative relationship between accidents in the workplace and financial performance. The relationship is stronger and more persistent on one year ahead performance than on the current year. We find no significant evidence of curvilinear U-shaped or inverted U-shaped relationships. Results are strong across different industries and samples, variable definitions and model specifications. The study contributes to the scarce extant research with reliable data and samples of a wide span of industries. It also contributes methodologically with refined analyses of the curvilinear relationship and providing robust widespread inference for a large number of industries.
We conduct empirical research on the flexibility of operating costs of e-commerce firms. With an ... more We conduct empirical research on the flexibility of operating costs of e-commerce firms. With an international sample of firms from different European countries, we find that e-commerce firms have a different cost structure than traditional retail firms, with a lower share of labor costs and cost of goods sold, but a higher share of other operating costs. While we find no significant different behavior in cost of goods sold and labor costs between the two types of firms, e-commerce firms are more flexible in adjusting other operating costs than traditional retail firms when activity decreases. Results are robust to different models, estimations methods and samples. The higher flexibility of e-commerce firms relies on other operating costs, but e-commerce creates qualified jobs with higher wages than traditional retail, with no additional exposure to labor uncertainty for employees.
Expenses Manipulation as an Indication of Mafia Money Laundering
This study aims to determine whether accounting information can contribute to understanding the m... more This study aims to determine whether accounting information can contribute to understanding the mechanisms of criminal funding and money laundering. In particular, we examine expenses manipulation within a sample of 224 Italian firms defined as legally registered Mafia firms (LMFs), due to their owners being accused of Mafia-type association. For this purpose, we adopt some expenses manipulation proxies whose patterns may provide empirical evidence of underlying illicit and/or opportunistic practices within LMFs. Our results reveal that before confiscation LMFs upward manipulate material expenses and downward manipulate personnel and service expenses with a cumulative negative effect on reported cash flow relative to sales. In contrast, following the confiscation and intervention of legal administrators, personnel and service expenses manipulation becomes insignificant, whereas material expenses manipulation significantly decreases relative to before confiscation. An additional anal...
Usefulness of Fair Value for Cash Flow Prediction: Evidence from Biological Assets
IRPN: Innovation & Biolaw & Policy (Topic), 2017
This study develops an empirical analysis of the relevance of accounting information when biologi... more This study develops an empirical analysis of the relevance of accounting information when biological assets are measured at fair value. We use an international sample of firms with biological assets. We find that biological assets influence unpredictability when they are measured at historical cost (HC). In this case, the ability of accounting data to predict future cash flows diminishes as the proportion of biological assets on total assets increases. The valuation at fair value (FV) switches this negative influence of biological assets to a positive one. We find that when they are measured at FV the prediction accuracy of future cash flows improves as the ratio of biological assets to total assets increases. This evidence is robust to different measures of prediction accuracy, as well as to the improvement of accounting standards, regardless of FV, over time. The evidence is weaker for bearer plants.
Labor Tax Avoidance Measures and Determinants: Empirical Tests on French Unlisted Firms
We develop new measures of labor tax avoidance (LTAV) using social contribution expenses reported... more We develop new measures of labor tax avoidance (LTAV) using social contribution expenses reported in income statements of 1,049,606 French firm-years. Based on a simulation experiment, our results reveal that LTAV measure based on abnormal social contribution expenses outperforms the others. Moreover, we find that macroeconomic and firm-specific financial variables significantly influence LTAV. These LTAV measures could integrate other methods applied to estimate undeclared work. Furthermore, their ability to reveal LTAV may assist tax authorities to detect labor tax evasion and then strengthen the protection of the employees, as well as reducing tax revenue shortfall in the social security system.
Journal of Business Economics and Management, 2021
This study investigates audit quality under joint and single audit regimes with a sample of large... more This study investigates audit quality under joint and single audit regimes with a sample of large European firms. Both, the economic relevance of these companies, and the fact that the impact of joint audit on audit quality should be stronger when the audited company is a blue-chip firm motivate the study. If mandatory joint audit were positively associated with audit quality, French firms, under mandatory joint audit since 1966, should present higher audit quality compared to their European peers. The results do not indicate this to be the case. Specifically, similar levels of discretionary accruals are observed for French and other European firms. Furthermore, for the first time in the literature, evidence is reported indicating that French firms may even present lower audit quality than their European peers, when audit quality is measured by the likelihood of just beating earnings benchmarks. These results are expected to inform the ongoing debate in several countries about joint...
Effects of the award of public service contracts on the performance and payroll of winning firms
Industrial and Corporate Change, 2021
We investigate the effects of an exogenous demand shock arising from the award of public service ... more We investigate the effects of an exogenous demand shock arising from the award of public service contracts by Italian public administrations in 2015 on a sample of 1782 winning small and medium firms that were not awarded any contract during the previous 3 years. Using a difference-in-differences model with continuous treatments estimated on a propensity score matched sample, our results reveal that higher awarded values enhance various performance dimensions of the winning firms as well as their average payroll per employee. Nonetheless, higher winning rebates moderate the positive effects of the award on payroll by inducing the winning firms to downward manage both salaries and social security contributions per employee to maintain their desired level of performance. The effects are mostly significant for smaller microenterprises. In addition, winning rebates negatively affect the performance of firms in the construction industry by leading these firms to downward manage the payro...
Journal of International Accounting, Auditing and Taxation, 2020
This paper reports an empirical analysis of the influence of e-commerce business practices on tax... more This paper reports an empirical analysis of the influence of e-commerce business practices on tax avoidance. Using a sample of European parent firms in the retail trade industry from 22 different countries, we find empirical evidence that e-commerce firms are significantly more tax avoidant than traditional firms. However, as the latter have increasingly sought to avoid paying taxes over the period studied, the gap between the two firm types has been reduced. Our results are robust to different specifications of tax avoidance, time, and sample selection criteria.
A pesar de la evidencia que sugiere que el conocimiento especializado debería resultar más releva... more A pesar de la evidencia que sugiere que el conocimiento especializado debería resultar más relevante que el genérico para explicar diferentes niveles de calidad de auditoría asociados a los auditores individuales, ningún estudio hasta la fecha ha abordado el posible impacto diferencial de la experiencia genérica y específica en la calidad de los servicios de auditoría. Nuestro estudio investiga esta cuestión en el mercado de auditoría español. Aproximamos la calidad de la auditoría a partir de los ajustes de devengo discrecionales y la opinión del informe de auditoría; diferenciando entre experiencia específica con el propio cliente, experiencia sectorial y experiencia de auditoría genérica. Como se esperaba, los resultados muestran una mayor calidad de auditoría cuando el cliente es auditado por un socio con mayor experiencia en el sector de actividad del cliente. También observamos que ni la experiencia específica con el propio cliente, ni la experiencia genérica de auditoría del ...
Board‐level ethics committees in large European firms
Business Ethics: A European Review, 2020
After the approval of a code of ethics, the creation of a permanent board‐level ethics ... more After the approval of a code of ethics, the creation of a permanent board‐level ethics committee is the next step in the institutionalization of business ethics. This study explores how the board's structure and demographic characteristics explain the decision to form an ethics committee. The analysis is based on the constituents of the Standard and Poor's Europe 350 index. Consistent with our hypotheses, we find that ethics committees are more likely to be found in firms with a lower presence of executive directors and of directors holding MBA degrees. However, we also observe that boards chaired by executive directors seem to favor the creation of an ethics committee. Additionally, as we had anticipated, firms with stronger agency conflicts seem to be more willing to create committees. The analysis conducted with segmented samples reveals that the model has greater explanatory power when applied to firms from common‐law and French civil‐law countries than when applied to firms from the German–Scandinavian civil‐law area. Finally, our results indicate that a firm's country of origin is a more influential factor in explaining the decision to create an ethics committee than the industry to which it belongs or even the magnitude of its agency conflicts.
This study evidences one of the adverse effects of e-commerce on labour tax avoidance, and more p... more This study evidences one of the adverse effects of e-commerce on labour tax avoidance, and more precisely in the loss of firms' social security contributions. With a sample of French ecommerce and traditional retail firms, we find that labour tax avoidance is significantly higher in e-commerce than in traditional retail firms. Results are robust to all measures of labour tax avoidance used in this study, to different estimation methods, sample selection criteria and sensitivity analyses. We discuss and conclude on the adverse effects of the digital economy and e-commerce on employees' welfare and social wellbeing.
PurposeThis paper develops novel proxies for labour tax avoidance (LTAV) and tests their validity... more PurposeThis paper develops novel proxies for labour tax avoidance (LTAV) and tests their validity within a sample of 189 labour tax-avoidant offending firms (LTAOFs) accused of evading social security contributions (SOCs) by public authorities.Design/methodology/approachLTAV proxies are based on abnormal values of SOCs paid, reported in the income statements of a sample of 857,790 Spanish firm-years for the period 2001–2015, estimated through two-stage least square panel data regressions with firm fixed effects.FindingsThe results reveal that proxies specifically built to signal both conforming and non-conforming LTAV can provide evidence of abnormally low SOCs as expenses within the sample of LTAOFs. Furthermore, firm-specific financial variables as well as macroeconomic variables significantly influence LTAV.Research limitations/implicationsThis study could foster further research on the efficacy of the LTAV proxies and on the drivers and sustainability implications of LTAV for fi...
Spanish Journal of Finance and Accounting / Revista Española de Financiación y Contabilidad, 2020
We investigate the relationship between auditor-provided tax services (APTS) and tax avoidance st... more We investigate the relationship between auditor-provided tax services (APTS) and tax avoidance strategies of their clients in the Spanish market. As a result of a recently enacted EU legislation, APTS is seriously restricted within the EU. The evidence available so far for the US provides consistent support for a positive relationship between APTS and tax avoidance. However, given the importance of country-specific institutional issues, such as litigation risk, to understand the relationship between auditors and clients, the possibility of generalizing the US evidence to other countries is limited. Supporting this view, our results indicate that the positive relationship between APTS and tax avoidance observed in the US does not hold in the Spanish market. In fact, the univariate analysis shows that firms which buy tax services from their auditors present significantly higher mean and median effective tax rates. Subsequently, in the multivariate analysis, we do not observe any significant relationship between APTS and tax avoidance. This result seems robust, as it holds independently of the proxy utilized for measuring tax avoidance, as well as across an array of sensitivity checks. This study has potentially interesting implications at both theoretical and practical levels.
The Effects of Immigration on Labour Tax Avoidance: An Empirical Spatial Analysis
Journal of Business Ethics, 2019
We investigate whether the geographic concentration of non-EU immigrants in the various Italian p... more We investigate whether the geographic concentration of non-EU immigrants in the various Italian provinces affects labour tax avoidance (LTAV) practices adopted by firms located in the same provinces, as well as in the neighbouring provinces, and operating in construction and agriculture industries that mostly employ immigrants in Italy. For this purpose, we develop a LTAV proxy based on the financial accounting information of a sample of 993,606 firm-years, disseminated throughout the 108 Italian provinces, over the period 2008–2016. Our results, based on a Spatial Durbin Model panel regression, reveal a statistically significant positive association between the concentration of non-EU immigrants and LTAV at province level, as well as the presence of spillover effects among neighbouring provinces. Our findings are robust to several additional analyses, including instrumental variable estimations. Our study provides empirical support to previous structuralist or marginalization theories holding that socioeconomically marginalized groups, such as non-EU immigrants, are more likely to be involved in labour exploitation practices, which could underlie our LTAV outcomes. Furthermore, it supports the need for tax authorities to strengthen labour inspections, coordinated at national level, especially in those contexts where non-EU immigrants are mostly employed. On the other hand, a greater social integration, assistance, and recognition of rights of immigrants may help to alleviate their situation of weakness that makes them more vulnerable to LTAV practices. Finally, tackling LTAV, associated with the underemployment of immigrants, may prevent its negative effects for society arising from the reduction of public resources to sustain the social welfare and finance public goods and services.
We investigate the impact of audit firm tenure, partner tenure, audit fees, fees for non-audit se... more We investigate the impact of audit firm tenure, partner tenure, audit fees, fees for non-audit services and total fees on audit quality, as measured by discretionary accruals. Our sample consists of Spanish non-financial public companies for the years between 2006 and 2013. Results indicate that audit quality increases with audit firm tenure but decreases with partner tenure. Moreover, the level of fees paid to the audit firm seems to have a negative impact on audit quality, which is mainly driven by fees for audit services. In this regard, we do not observe any significant relationship between fees for nonaudit services and audit quality. Our results also show that the negative relationship between either long partner tenures or high fees and audit quality does not occur when the tenure with the audit firm is long. Therefore, long audit firm tenures do not only seem to involve higher audit quality 'per se', but also moderate the negative effects of partner tenure and audit fees on audit quality. The results of this study, which are robust to several sensitivity checks, may be relevant for the current debate on auditor rotation and the joint provision of audit and non-audit services.
Journal of Business Economics and Management, 2019
This article examines the relationship between CEO characteristics and firm performance with a sa... more This article examines the relationship between CEO characteristics and firm performance with a sample formed by the best performing CEOs in the world according to Harvard Business Review. The empirical analysis is based on descriptive statistics techniques and studies the universe of CEOs included in the 2016 ranking “The Best-Performing CEOs in the World” released by Harvard Business Review. Moreover, it addresses performance at various levels: financial performance, environmental, social and governance performance (ESG) and overall performance. The findings of the study show: 1) a strongly negative association between financial and ESG performance; 2) outsider CEOs outperform insider CEOs in overall performance; 3) CEOs with engineering degrees show significantly higher ESG performance; 4) CEOs with longer tenures in the firm present stronger financial performance though weaker ESG performance; and 5) the CEO’s country of origin emerges as an important driver to explain the differ...
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Papers by Diego Ravenda