Search results for "Depreciation"
showing 10 items of 11 documents
The devil is in the details : Capital stock estimation and aggregate productivity growth : an application to the Spanish economy
2020
The variables that contribute to explaining the major puzzles and paradoxes in macroeconomics and economic growth literature always appear related, directly or indirectly, to capital stock and depreciation. Depreciation defined in a narrow sense refers only to physical wear and tear, but in a broader sense, it also includes economic deterioration and obsolescence. In this study, we explore the link between these two depreciation concepts, the capital deepening and total factor productivity (TFP) growth. We propose a double growth accounting framework that allows us to establish a relationship between variables in statistical terms and variables in economic terms. Then, with Spanish data for…
Low-cost trends in audit fees and their impact on service quality
2018
Abstract The 2008 financial crisis has transformed the business environment. The number of audited firms has fallen considerably since the crisis, leading to a reduction in the cost of auditing services as a result of fierce competition among auditors. This drop in audit fees is of great concern for audited firms because it may be correlated with a fall in audit service quality. Such a fall in quality ultimately harms the prestige of audited firms and therefore negatively affects their profits. Based on an application of fuzzy-set qualitative comparative analysis (fsQCA), this paper analyzes the quality of audit services following a drop in the fees charged by auditors. The factors analyzed…
Endogenous Growth, Capital Utilization and Depreciation
2004
We study the one sector model of growth when a linear production technology is combined with adjustment costs and a technology for capital maintenance. Agents are allowed to under-use the installed capital and to vary the depreciation rate. This economy decides endogenously how much resources devotes to the accumulation of new capital and how much to maintenance and repair activities. We find as striking results that the long-run depreciation and capital utilization rates are positively related to the population growth rate, and that both depend negatively on the intial conditions. The long-run growth rate appears positively correlated with the depreciation rate.
A letter from Malevich to Semevsky about Kovalevskaya
2022
Abstract The biographical literature on Sofya Vasilyevna Kovalevskaya has to a large extent relied on her own memoirs, published in Vestnik Evropy only months before her death, and an autobiographical story published posthumously in Russkaya Starina. In this paper we present and discuss the full Russian text with English translation of a letter, previously unpublished, from Kovalevskaya's teacher in childhood and adolescence, Iosif Ignatyevich Malevich, to the editor of Russkaya Starina, Mikhail Ivanovich Semevsky, in which he repudiates her depreciation of his role in her schooling, criticizes her self-portrayal, and provides information about her early education which runs counter to part…
The Euro's Effect on Trade Balance Dynamics
2015
During the pre-EMU period changes in real effective exchange rate or faster-than-trading-partners growth rates Granger caused changes in trade balance in most of the EMU-12 countries. However, our data driven article provides evidence that after the adoption of euro, these Granger causalities disappeared. We decompose trade balances into intra balances (trade balance vis-a-vis the euro area) and extra balances (trade balance vis-a-vis the rest of the world), and find that the disappearance of dynamic feedback effect typically occurred in the intra balances rather than in the extra balances. Our results imply that debtor countries cannot reduce their trade deficits in the short-run by enhanc…
Breakup and default risks in the great lockdown
2023
Abstract In this paper, we exploit CDS quotes for contracts denominated in different currencies and with different default clauses to estimate the risk of a breakup of the Eurozone and the propagation of breakup and default risks after the COVID-19 shock. Our main result is that the risk of a Eurozone breakup is significant although, quantitatively, it is not larger than in the period before the COVID-19 shock. In addition, we find that an increase in the redenomination risk in one country is associated with an increase in default premia and bond spreads in other Eurozone countries. Finally, we find that a sizeable fraction of the changes in the cost of insuring against redenomination and d…
Economic and statistical measurement of physical capital: From theory to practice
2018
Abstract The standard measurements of capital and depreciation are statistical measures based on assumptions about the average service life of capital goods, which are accumulated according to the perpetual inventory method. The purpose of this paper is to obtain a true economic measure of capital stock according to the prescriptions of the neoclassical theory. In this way, we develop an alternative method based on the equations that solve the dynamic optimization problem of the firm, yielding an economic estimation based on indicators of profitability, such as the distributed profits and the Tobin's q ratio. Thus, this method enables us to endogenously calculate the variables' rate of depr…
La capitalización de los arrendamientos operativos: Análisis del impacto en las empresas del IBEX 35
2018
Purpose: This paper analyzes the consequences of the change in the accounting rules about operating leases in the companies and users of financial information. Design/methodology: We use the constructive capitalization method to estimate the liabilities and leased assets and perform an ex ante analysis of the regulatory impact in the IBEX 35 non-financial companies. Non-parametric tests are employed to examine the effect on certain ratios, and through a multivariate regression we investigate the business characteristics that explain the variation of EBITDA. Findings: The ratios under study are significantly affected by the capitalization of operating leases. The explanatory analysis shows t…
Tax incentives to encourage corporate investment in Latvia
2020
During 2006‐2017, Latvia has applied a rather generous accelerated depreciation (AD) policy to stimulate firm investment. The AD policy included: (1) the general AD scheme, (2) incentives to acquire new technological equipment, and (3) Investment incentives in the specially assisted areas. This paper analyses the effect of accelerated depreciation policy on firm investment using administrative firm‐level data for 2007–14. Lacking data for a natural experiment (AD began before our sample period), we use difference‐in-differences methodology with identification based on variation either across time (the crisis period serving as quasi‐counterfactual) or by firm size (with large firms unlikely …
Incentive System Design Based on Accrual Accounting: A Summary and Analysis
2009
ABSTRACT: This paper provides a formal analysis on how to design accrual-based incentive systems so that a manager's and owner's interests are properly aligned. We introduce a general framework to summarize the literature, provide various extensions to it, and point to some of its limitations. We characterize the entire class of goal-congruent and preference-similar incentive systems when the owner has perfect as well as imperfect information about the manager's preferences. This allows us to show how compensation functions and performance measures are interrelated and to demonstrate what information should be incorporated into compensation functions and performance measures. We illustrate …