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Category Archives: Financial System

Market Valuation of Tax Avoidance and Corporate Social Responsibility

Inger, Kerry Katharine and Vansant, Brian, Market Valuation of Tax Avoidance and Corporate Social Responsibility: Does the Market Discount Corporate Robin Hoods? (January 4, 2016). Available for download at SSRN: http://ssrn.com/abstract=2727952

This study examines whether market valuation of firms’ tax avoidance is tempered by the extent firms engage in Corporate Social Responsibility (CSR) activities. Prior studies document that investors positively value tax avoidance. The rationale for this finding is that tax avoidance provides cash savings that can be used by firm managers to generate future shareholder wealth. Prior studies also show that investors’ valuations are sensitive to the risk of future negative tax outcomes. Assuming that many types of CSR activities are low risk, low yielding uses of firm resources, we posit that higher levels of CSR activities may signal to investors that cash generated via tax avoidance has not been (or will not be) fully used to generate a return sufficient to offset the risk associated with aggressive tax planning strategies. Consistent with this argument, we predict and find that the positive association between market value and tax avoidance is significantly weakened when firms have higher positive levels of CSR activity. Further, we predict and find that ‘philanthropic’ types of CSR activities in particular are associated with investor discounting of tax avoidance. We interpret our results as suggesting the equity market views CSR activities to be ostensibly funded through cash savings generated via tax avoidance.”

US International Trade in Goods and Services December 2015

“The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $43.4 billion in December, up $1.1 billion from $42.2 billion in November, revised. December exports were $181.5 billion, $0.5 billion less than November exports. December imports were $224.9 billion, upContinue Reading

Downloadable Housing Market Data From Redfin

Via Redfin: “Redfin is a real estate brokerage, which means we have direct access to data from local multiple listing services, as well as insight from our real estate agents across the country. That’s why we’re able to give you the earliest and most reliable data on the state of the housing market. We publishContinue Reading

By the Numbers: The Costs of War and Peace in the Middle East

World Bank – By the Numbers: The Costs of War and Peace in the Middle East – Five years of war in Syria and spillovers to neighboring countries have cost an estimated $35 billion in output, equivalent to Syria’s GDP in 2007. A new report examines how civil wars are affecting the economies of theContinue Reading

State of US Labor Market: Pre-February 2016 Jobs Release

Report via Center for American Progress – “On Friday, February 5, 2016 the U.S. Bureau of Labor Statistics will release the employment report for the month of January. This month’s report will be an important indicator of whether the volatility in financial markets reflects underlying trends in the real economy—specifically, the labor market. With theContinue Reading

President Obama Proposes New ‘First Job’ Funding to Connect Young Americans with Jobs

Fact Sheet: “After the worst economic crisis of our lifetimes, the United States is in the midst of the longest streak of private-sector job growth in our history, with more than 14 million new jobs created during the past 70 months. But for too many young people, getting a first job—a crucial step in startingContinue Reading

The Trans-Pacific Partnership: Strategic Implications

CRS report via FAS – The Trans-Pacific Partnership: Strategic Implications, February 3, 2016. “…Although most U.S. observers agree it is in the U.S. interest to lead in establishing global and regional trade rules, less consensus exists on what those rules should be, yielding some criticism on the strength and breadth of various TPP provisions. InContinue Reading

Commonwealth report calls for clearer legislation for virtual currencies

“Virtual currencies offer countries a cost-effective, fast and accessible alternative to settling financial payments, but unclear laws and regulations are preventing their responsible development and encouraging their exploitation by criminals, says a new Commonwealth report. Virtual currencies, which allow funds to be transferred, traded or stored electronically, have seen exponential growth in recent years, however,Continue Reading

Urban Institute – Social Security Data Tool

Social Security Data Tool:  “Search, visualize, and download data about the Social Security system, with an emphasis on the disability insurance program.”

Linking ‘toxic outliers’ to environmental justice communities

Environ. Res. Lett. 11 (2016) 015004 doi:10.1088/1748-9326/11/1/015004. Linking ‘ toxic outliers ’ to environmental justice communities, Mary B Collins, Ian Munoz and Joseph JaJa “Several key studies have found that a small minority of producers, polluting at levels far exceeding group averages, generate the majority of overall exposure to industrial toxics. Frequently, such patterns goContinue Reading

Federal Reserve Highlights Progress in Efforts to Improve U.S. Payment System

“In a report that comes one year after the publication of its Strategies for Improving the U.S. Payment System, the Federal Reserve on Tuesday detailed the progress made and outlined anticipated steps for moving forward with its initiative to enhance payment system speed, efficiency, and security. To date, the January 2015 initiative has resulted inContinue Reading

Capital markets and job creation in the 21st century

“The early 21st century has witnessed a sea change in the nature of employment and in the shape of the corporation in the United States. Employment has shifted from the career, to the job, to the task. In this paper, Jerry Davis argues that the death of the career and the rise of the gigContinue Reading