Suchergebnisse

In 2012, the Chinese government replaced the existing business sales tax with a Value-added tax for some, but not all, Shanghainese firms. The change was intended to reduce the effective tax rate for firms and stimulate capital investment and employment. Of concern is the potential for managerial moral hazard, whereby self-interested managers might appropriate some of the tax savings for themselves rather than use the tax savings as intended. This paper examines the impact of the tax change on the affected firms and finds no significant evidence that the intended positive effects were achieved. Moreover, it also finds no strong evidence of moral hazard. Instead, the paper documents that the tax change seems to have had a deleterious effect on firm performance. Specifically, employee compensation, capital expenditures, and free cash flow are all lower when the tax changes became effective, with the negative impact on cash flows lingering through 2014. An examination of the effective tax rate reveals that the tax change increased rather than decreased the effective tax rate in 2012 and 2013.

ABSTRACTThis article optimizes a finite population, dynamic, stochastic inventory model where future demand is endogenous to inventory policy. Specifically, satisfied customers are not only likely to remain with the firm, but may also refer new customers. In contrast, backorders and lost sales may cause disgruntled customers to defect and potentially cause them to dissuade new customers from doing business with the firm. Thus, inventory policy and customer demand are endogenous. Further, the model allows for the possibility that too many customer defections may lead to product market failure. The incorporation of these innovations into our model yields inventory policies that differ substantially from those reported in the literature, with the greatest differences occurring when the firm has low to medium market share.