This study provides quantitative evidence on the positive effect of spending on socially responsible causes on the long-term growth of U.S technology companies. Maximizing shareholder wealth remains the overarching principle driving organizational strategies, but this has always conflicted with other stakeholders' interests. Because of these conflicting priorities, entrenching the principles of social responsibility has become imperative. We leverage content analysis, fixed-effects and pooled regression models to examine the effect of engaging in CSR on tech companies' corporate financial performance in the U.S. The empirical study consists of panel data of the top 100 tech companies listed on the S&P 500 for the period 2017 and 2019. We examine the link between corporate financial performance and CSR proxies. The main results indicate that tech companies that spend more on CSR experience a corresponding increase in revenue and profitability. Contrary to previous studies, we observe insignificant evidence to support a relationship between CSR and Tobin's Q.
We investigate the drivers of credit union penetration with data from 90 countries for the period 2005–2017. Generally, the results show that the number of credit unions, the level of financial development of a country, the level of industrialization of a country, and the institutional environment are significantly supportive of credit union penetration. We conclude that the elimination of restrictions on the formation of credit unions (if any), the adoption of industrialization as development path, the implementation of sound monetary and fiscal policies that promote financial development, and the pursuit of good public governance are crucial for credit union penetration.
Mergers and acquisitions have continued to serve as a primary financing tool undertaken by organizations to achieve corporate objectives. Despite the increased popularity of the mergers and acquisitions phenomenon, determining acceptable metrics for identifying successful mergers and acquisitions continue to pose challenges to investors, financial analysts and other stakeholders involved with mergers and acquisitions. Mergers and acquisitions activities have presented mixed outcomes to different organizations with high failure rates recorded in some and less-significant successes reported in others. Consequently, understanding acceptable metrics for determining a successful merger or acquisition becomes paramount given the challenges experienced by players in that industry. Therefore, a thorough review of the literature is made in this study to identify factors that improve the chances of mergers and acquisitions success. The unique features of successful and unsuccessful mergers and acquisitions are itemized to provide a premise for assessing and evaluating the essential characteristics that make mergers and acquisitions successful. The importance of due diligence, low acquisition purchase premiums, and related business acquisitions in the mergers and acquisitions process were fully explicated. Low acquisition purchase premiums, timing of mergers and acquisitions and related business acquisitions were found to tremendously enhance the success of mergers and acquisitions.
Objective – Tax policies play significant role in the direction of foreign direct investments. We investigate the proposition that tax policies enacted by military and democratic regimes differ on the influence the foreign direct investments. Methodology/Technique – Our hypotheses are tested using the error correction model as we compare the impact of tax policies on flow foreign direct investments in Nigeria between two dispensations: military rule from 1983 to 1999 and democratic rule from 1999 to 2017. Panel data between 1983 and 2017 were obtained from the databases of the World Bank, Central Bank of Nigeria and the Federal Inland Revenue Services. The explanatory variables include company income tax, value added tax, tertiary education tax and customs and exercise duties. Findings – The study reveals that tax variables during the military regime exerted more explanatory power of 79% compared to the civilian administration of 66% with respect to the impact of corporate taxes on FDI. The effect of company income tax on FDI was more pronounced during the military regime than in the civilian regime. FDI had a higher degree of convergence during the military regime compared to civilian rule, and this is vital for policy assessments and comparison. Novelty – We bring to light new evidences on the effects of taxes polices on FDI. Type of Paper: Empirical Keywords: Corporate taxes; Tax Policies; Foreign Direct Investments; Error Correction Model; Military regime; Civilian regime. Reference to this paper should be made as follows: Edo, O.C; Okafor, A; Emmanuel, A. (2020). Tax Policy and Foreign Direct Investment: A Regime Change Analysis., J. Fin. Bank. Review, 5 (3): 84 – 98 https://doi.org/10.35609/jfbr.2020.5.3(3) JEL Classification: E22, F21, H2, P33.
Objective – The purpose of this study is to investigate the effect of corporate taxes on the flow of Foreign Direct Investment (FDI) in Nigeria between 1983 and 2017. Methodology/Technique – This study adopts an ex-post facto research design. Secondary data was sourced from the World Bank Development Indicator, the Central Bank of Nigeria database, and the Federal Inland Revenue database. The research data was analyzed using the Error Correction Model (ECM). Findings – The coefficient of determination (R2) shows that approximately 77% of systematic changes in FDI are attributed to the combined effect of all of the explanatory variables used in this study. Specifically, the study concludes that Company Income Tax, Value Added Tax, and Custom and Excise Duties have a significant but negative relationship with FDI. In contrast, Tertiary Education Tax has a positive association with FDI. Further, Exchange Rate has a negative but significant relationship with FDI, Inflation had an insignificant but positive association with FDI, and GDP growth Rate and Trade Openness demonstrate a positive and significant association with FDI. Novelty – The findings of this study are distinguishable from previous studies, as it uncovers new evidence that higher Education Tax Rates influences FDI and emerging evidence on the effect of non-tax variables on FDI inflow. Type of Paper: Empirical. JEL Classification: E22, F21, H2, P33. Keywords: Corporate Taxes; Foreign Direct Investment; Error Correction Model; Nigeria; Non-Tax Variables. Reference to this paper should be made as follows: Edo, O.C; Okafor, A; Justice, A.E. 2020. Corporate Taxes and Foreign Direct Investment: An Impact Analysis, Acc. Fin. Review 5 (2): 28 – 43. https://doi.org/10.35609/afr.2020.5.2(1)
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