Accounting, Economics, and Law: A Convivium

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Contents
Journal Overview

Publicly Available September 21, 2023

The Elephant in the Room: p-hacking and Accounting Research

Ian D. Gow

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Abstract

Ohlson (2023. Empirical accounting seminars: Elephants in the room. Accounting, Economics, and Law: A Convivium ) draws on his experience in empirical accounting seminars to identify five “elephants in the room”. I interpret each of these elephants as either a variant or a symptom of p-hacking. I provide evidence of the prevalence of p-hacking in accounting research that complements the observations made by Ohlson (2023. Empirical accounting seminars: Elephants in the room. Accounting, Economics, and Law: A Convivium ). In this paper, I identify a number of steps that could be taken to reduce p-hacking in accounting research. I conjecture that facilitating and encouraging replication alone could have profound effects on the quality and quantity of empirical accounting research.

Publicly Available September 14, 2023

The Failure of a Pure Patent Market

Christian Bessy

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Abstract

This paper presents an analysis of the movement to make patents a new asset class, and its relative failure. Our thesis is that this creation is largely dependent on the construction of a market devoted to transactions in patents, and not just in technology licenses, and on the emergence of new intellectual property intermediaries akin to finance, whose activity must nevertheless be regulated. Our analysis is based on the various patent valuation conventions that underpin its institutionalization and the variety of its uses.

August 22, 2023

Yoshitaka Fukui

Abstract

Two papers on the nature of equity and its implication for accounting and public policy are introduced.

Publicly Available December 6, 2022

Democratic Central Banking: Power Not Deliberation

Publicly Available October 8, 2021

Transfer Pricing Audit Challenges and Dispute Resolution Effectiveness in Developing Countries with Specific Focus on Zimbabwe

Favourate Yelesedzani Sebele-Mpofu, Eukeria Mashiri, Patrick Korera

Article number: 000010151520210026

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Abstract

Base erosion and profit shifting activities of multinational enterprises (MNEs) have been a hot issue globally. Topical among the strategies employed by MNEs has been the issue of transfer pricing (TP). Developing countries are argued to be significantly affected by TP manipulation resulting in substantial tax revenues being lost. As a response to curb the unfavourable impacts of transfer mispricing, most developing countries have adopted the OECD TP guidelines and enacted TP legislation to regulate TP activities. The arm’s length principle is the core of TP legislation, yet it has brought challenges for tax administrators and their auditors in enforcing and assessing compliance respectively leading to disputes. In view of the ever-changing business world and continuous efforts by MNEs to minimise their tax obligations through income shifting, it was imperative to assess the factors affecting the effectiveness of TP audits and dispute resolutions as measures to enhance compliance and enforcement in developing countries, with specific reference to Zimbabwe. Findings include the lack of clarity in TP legislation, resource constraints and complexity of transactions, lack of expertise as well as the shortage of comparable data. Developing countries are encouraged to formulate clear TP regulations and invest in the capacitation of revenue authorities.

Publicly Available September 17, 2021

The Symmetry and Asymmetry of Bidder and Target Termination Fees in Acquisitions

Christina E. Bannier, Corinna Ewelt-Knauer, Mohamed Amin Khaled, Jan-Philipp Kölling

Sigurt Vitols

Article number: 20190056

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Abstract

In part due to recent disclosures of large-scale tax evasion (e.g. Panama Papers), corporate tax avoidance has become a prominent public policy issue around the world. An increasing amount of research on this topic has focused on identifying the determinants of tax avoidance at the company and country level. Many newer studies examine differences in corporate governance as one of these determinants. However, this literature almost entirely neglects the role of board level employee representation (BLER), despite the fact that this form of ‘stakeholder governance’ is widespread in Europe. This paper addresses this gap in the literature by examining the relationship between BLER and tax avoidance at the company level. Two mechanisms are identified through which BLER might influence corporate tax behavior: 1) reduction in agency costs through monitoring and 2) the voting power of workers as board members to enter into coalitions with management and/or shareholders. Based on a sample of 2343 European listed companies between 2012 and 2017, this paper shows that companies with BLER have a higher effective tax rate (ETR) than companies without workers on the board. The analysis suggests that the ability to form coalitions through voting power is a more significant channel for influencing tax behavior than the monitoring mechanism. The policy implications are that governments should consider ‘stakeholder governance’ such as BLER as one measure supporting their efforts to combat tax avoidance.

This empirical study explores the financialization of social sustainability driven by sustainability accounting and reporting initiatives (SARIs). Since no globally accepted definition of what social sustainability encompasses exists, the paper asks how social sustainability is translated into the financial market language by SARIs as they provide standards for disclosing corporate non-financial performance and promote their concepts of social sustainability. The paper uses a two-step qualitative content analysis. First, it operationalizes social sustainability based on the empirical data of six sustainability rating agencies. Second, this operationalization is compared with the concepts created by three SARIs. The paper shows significant differences between the concepts of the SARIs and the rating agencies. While the rating agencies altogether interpret social sustainability with 83 distinct aspects, the SARIs, although differently created, use significant reduced concepts where 20% of these aspects are absent. The result of this financialization process could be a simplified and financially determined concept of social sustainability within die socially discourse. The research is limited to social sustainability and its financialization by SARIs. Individual indicators and their way or intensity to capture aspects of social sustainability were not part of the research interest. Further research should investigate the economic and the ecological pillars of sustainability as well as the usage of such financialized concepts within the society and especially by corporations. The paper unfolds the arbitrariness of operationalizing a qualitative phenomenon like social sustainability through the financial system. It discloses the need for looking at the mechanisms behind such processes and at the interests of the actors behind the frameworks. The paper reveals the financialization process driven by SARIs and demonstrates its simplifying effects on the concept of social sustainability. Furthermore, the paper shows that SARIs as metrics for non-financial aspects are troubled with a lack of transparency and a lack of convergence.

Publicly Available January 6, 2021

Stablecoins, Central Bank Digital Currencies and US Dollar Hegemony

The Geopolitical Stake of Innovations in Money and Payments

Luca Fantacci, Lucio Gobbi

Article number: 20200053

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Abstract

Stablecoins are second generation cryptocurrencies, aimed at maintaining their value stable with respect to official currencies. The most famous example is perhaps represented by libra, the cryptocurrency announced by Facebook in 2019 and yet to be issued; the most widespread is tether, with a market capitalization of almost 10 billion dollars and a daily transaction volume of almost 50 billion dollars, which makes it the most used cryptocurrency. The diffusion of stablecoins is hardly surprising. By minimizing volatility – the main flaw of first generation cryptocurrencies, including bitcoin –, stablecoins are expected to play an even more important role on a global scale within a few years. Our contribution deals not with the economic, but specifically with the geopolitical factors that could foster the use of stablecoins for strategic and military purposes. In particular, we focus on how such payment instruments, together with other alternative electronic payment systems, could be used as a means to circumvent economic sanctions and ultimately as a challenge to the hegemony of the US dollar in the international monetary system.

Publicly Available January 4, 2021

Distributed Ledger Technology and the Future of Money and Banking

Banking is Necessary, Banks Are Not. Bill Gates 1994

Fred Huibers

Article number: 20190095

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Abstract

Nakamoto, S. (2008). Bitcoin: A peer-to-peer electronic cash system. https://bitcoin.org/bitcoin.pdf outlined an alternative to the current monetary system in which banks are replaced by a peer-to-peer system to issue and transfer digital money: the Bitcoin. While Bitcoin has attracted a substantial investment volume, the system has not achieved the status of a viable alternative monetary system. However, the distributed ledger technology (DLT) underlying the payment system is being applied successfully by financial institutions and is likely to have important implications for the future of money and banking. In this paper we therefore focus on the most advanced distributed ledger application in the financial industry: R3 Corda. This paper is structured as follows. In the first section, we relate the debate about systems of money creation to the rise of Bitcoin. Next, the development of R3 Corda is discussed and the lessons learned for monetary reform. We conclude with an assessment of the scope and likelihood of monetary reform as a consequence of DLT applications by central banks.

Publicly Available July 22, 2020

Rethinking the Concept of Equity in Accounting: Origin and Attribution of Business Profit

Satoru Otaka

Empirical evidence of the Portuguese chartered accountants’ perceptions of corporate taxation

Ana Dinis, António Martins, Cidália Lopes

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Abstract

Portuguese corporate income tax has a special feature rarely seen in other countries. Autonomous taxes are levied on an extensive set of corporate expenses, irrespective of corporate profitability. Fiscal revenue from the autonomous taxation of expenses comprises about 12 % of corporate income tax receipts, which illustrates its relevance for the tax authorities and the corporate world. As autonomous tax rules are usually interpreted and applied to certain corporate expenses by chartered accountants (CAs) when computing income tax liabilities and filling in tax returns, the purpose of this paper is to present an empirical study of the perceptions of Portuguese CAs regarding key dimensions of autonomous taxation of expenses (ATE), as these influence corporate tax management. Using a sample of 665 CAs surveyed, and applying factor analysis, the paper concludes that tax complexity, tax compliance and tax planning are the main dimensions of ATE perceived by respondents. Besides the corporate income tax impact on fiscal management, new layers of complexity, planning opportunities and compliance costs are perceived to be added by ATE. Additionally, by applying cluster analysis, the paper finds that sociodemographic characteristics of CAs (e. g. age, gender, professional environment, level of expertise) generate clusters of CAs with different perceptions of the role and consequences of ATE in the management of corporate tax affairs.

About this journal

Objective
The Journal of Accounting, Economics, and Law: A Convivium (CONVIVIUM) aims to encourage a comprehensive understanding of the relationship between individuals, organizations, and institutions in economy and society. Among other matters, attention will be paid to financial, economic, and legal methods and languages that have an important albeit neglected role in this relationship. Concerns of finance, control, accountability, responsibility, valuation, regulation, and governance will be raised in their connection with accounting, economics, law, sociology, anthropology, history, finance, political science, and the management and policy sciences. The journal encourages works that seek to recombine disciplinary domains in response to practical and relevant issues, including theoretical advances and insights, and comparative historical perspectives.

The journal is published with the collaboration of the Maison des Sciences de l'Homme - Paris Nord

Editorial Policy
While many journals cover accounting, economics and law separately, the intersection of these fields denotes common and significant concerns in society. Institutional rules and social norms are critical to workings of organizations. Beyond their technical aspects, these issues have broader societal and global consequences. CONVIVIUM is intended to their study.

This journal will pay attention to the institutional analysis of families, businesses, non-business organizations; and their management, finance, control, accountability, responsibility, valuation, regulation, and governance. Financial, economic, and legal devices lie at the heart of business and non business governance and regulation. The journal will examine their influence in the context of social, cultural, and political economy and history.

The journal will explore links among the disciplines in order to yield theoretical insights and perspectives on practice, and seek methodological pluralism and tolerance. Proposals are welcome from sociology, anthropology, history, political science, policy studies, finance, and management sciences.

Focusing at the connections among social disciplines, CONVIVIUM is a unique outlet for inter-disciplinary and combined perspectives. It welcomes transnational co-operative contributions, cross-fertilization of ideas, and will provide a supportive peer review process.

Methodological tolerance and pluralism
Methodological tolerance and pluralism is integral to interdisciplinary research. Formal modeling and quantitative methods of research can serve as a powerful discipline to abstract from myriad of details the essentials of a phenomenon. At the same time, not all the featuring aspects of phenomena are subject to quantification. Therefore, the journal will accept both quantitative and qualitative methods devoted to enhance our understanding of the phenomena of interest. Use of qualitative, quantitative, statistical and modeling methods is recognized.

The journal recognizes that comparative and combined approaches are the most suitable for its purpose. Theoretical, normative, explanatory, interpretative, and historical approaches with contemporary implications will be included. Descriptive studies that provide syntheses of national or international issues; comments, replies and rejoinders; and replications of works published by the journal will be encouraged.

Geographical variety
The journal encourages geographically-varied contributions, particularly those that draw on localized traditions of thought and experience to speak to common concerns. Accordingly, the Editorial Board may accept submissions in languages in English, French, and Italian, with the understanding that the authors' will provide a complete English version of the accepted paper for publication.

Supportive Peer Review Process
The journal welcomes submissions of articles, symposia, and proposals for thematic issues. It supplements its screening and evaluation peer reviews by discussion and cross-fertilization between editors, authors and reviewers, allowing them to move beyond the anonymity of the process, if they so choose, which seems to have outlived its usefulness in the Internet age. Blind peer review is always a choice if this is not preferable.

The reviewers will be expected not only to consider the final publication, but also to submit (i) a relevant set of "suggestions" (further references, structural amendments, and changes), and (ii) a "comment" discussing the paper from their own viewpoint. This comment, and any rejoinder by the author, may be published together with the paper subject to the reviewer's and editor's agreement.

Moreover, each paper will be generally read by at least two reviewers and one member of the Boards, of which at least one will have a primary interest relevant to - but different from - that of the author.

In summary, the journal seeks to attract potential authors through its systematic dedication to the enhancement of their work. The journal wishes to be, in Dante Alighieri's words, a 'Convivium,' convening compelling minds worldwide and promoting significant contributions to the understanding of social phenomena.

Topics

The quality and regulation of accounting
A critique of norms and standards of accounting, such as historical cost, fair value and mark-to-market accounting
National and international institutions of accounting, governance, and regulation
Corporate, fiscal, and securities laws and regulations
Business and not-for-profit accounting, economics, and regulation
Shareholder and stakeholder values and governance
Governmental accounting, economics, and regulation
Socio-economic analysis of family and divorce
Comparative history of accounting, economic, legal thoughts and experiences
Regulation of industries and markets, including environmental and public interest issues
Experimental and behavioral accounting, finance and economics
Accounting, economic, and legal issues in relation to social and cultural norms
Accounting, economic, and legal issues in relation to the theory and analysis of financial and monetary systems
Accounting, economic, and legal issues in relation to the theory and analysis of enterprise groups and multinational firms
Accounting, economic, and legal issues of ownership and property
The role of accounting and control in financial systems, including crises, instability, and resilience

Article formats
Original Research Articles, Commentaries, and Book Reviews.

Information on submission process