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John R Graham - One of the best experts on this subject based on the ideXlab platform.
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proxies for the corporate marginal tax rate
Journal of Financial Economics, 1996Co-Authors: John R GrahamAbstract:Abstract This paper focuses on how best to measure the corporate marginal tax rate, which is an important input into financial analysis of the cost of capital, Financing Policy, corporate hedging, and corporate reorganizations. The results indicate that the simulated tax rate used by Shevlin (1990) and Graham (1996), although difficult to calculate, is the best available proxy for the ‘true’ marginal tax rate. If the simulated rate is unavailable, an easy-to-calculate trichotomous variable or the statutory marginal tax rate (which captures the progressivity in the tax schedule) are reasonable alternatives, better than most commonly used tax variables.
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proxies for the corporate marginal tax rate
Journal of Financial Economics, 1996Co-Authors: John R GrahamAbstract:This paper focuses on how best to measure the corporate marginal tax rate, which is an important input into financial analysis of the cost of capital, Financing Policy, corporate hedging, and corporate reorganizations. The results indicate that the simulated tax rate used by Shevlin (1990) and Graham (1996), although difficult to calculate, is the best available proxy for the "true" marginal tax rate. If the simulated rate is unavailable, an easy-to-calculate trichotomous variable or the statutory marginal tax rate (which captures the progressivity in the tax rate schedule) are reasonable alternatives, better than most commonly used tax variables. The difficult task of forecasting taxable income is also discussed.
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proxies for the marginal tax rate
1995Co-Authors: John R GrahamAbstract:This paper focuses on how to best measure the corporate marginal tax rate, which is an important input into analysis of the cost of capital, Financing Policy, corporate hedging, corporate reorganizations, and the relative pricing between taxable and tax-advantaged securities. The results indicate that the simulated tax rate used by Shevlin (1990) and Graham (1996) is the best available proxy for the "true" marginal tax rate; however, the simulated variable is difficult to calculate. If the simulated rate is unavailable, a very easy-to-calculate trichotomous variable and the statutory marginal tax rate are reasonable alternatives, better than most commonly used tax variables. The difficult task of forecasting taxable income is also discussed.
Sigitas Karpavicius - One of the best experts on this subject based on the ideXlab platform.
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external growth opportunities and a firm s Financing Policy
International Review of Economics & Finance, 2019Co-Authors: Sigitas KarpaviciusAbstract:Abstract This study analyzes how external growth opportunities such as general demand growth impact a firm's Financing Policy. The model developed in this paper implies that a firm's optimal leverage ratio decreases with growth opportunities if the firm's manager is not highly risk-averse, but increases otherwise. The relation is driven by the respective changes in equity value. Our empirical tests show that equity value is greater and that financial leverage is lower for high-growth firms. This suggests that firms' managers are not highly risk-averse, on average. This paper provides an alternative explanation for the negative relation between leverage and growth opportunities.
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external growth opportunities and a firm s Financing Policy
Social Science Research Network, 2015Co-Authors: Sigitas KarpaviciusAbstract:The theoretical model developed in this paper implies that equity value does not always increase with a firm's external growth opportunities, as suggested by the Gordon dividend growth model. There is a positive (negative) relation when the coefficient of constant relative risk aversion of a firm's manager is lower (higher) than her subjective discount factor. The predicted impacts of growth opportunities on leverage are the opposite to those on equity value. Our empirical tests show that equity value is greater and that financial leverage is lower for high-growth firms. The results suggest that firms' managers are either risk-seeking, risk-neutral, or weakly risk-averse, on average.
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the cost of capital and optimal Financing Policy in a dynamic setting
Journal of Banking and Finance, 2014Co-Authors: Sigitas KarpaviciusAbstract:Abstract This paper revisits the Modigliani–Miller propositions on the optimal Financing Policy and cost of capital in a dynamic setting. In an environment without taxes and bankruptcy costs, the results are generally consistent with the Modigliani–Miller Propositions 1 and 2. However, the first proposition should be presented and interpreted more carefully, as given firm characteristics, there is only one optimal capital structure. Thus, a firm’s capital structure is relevant. A relaxation of assumptions about either taxes or bankruptcy costs leads to conclusions that are generally different from those in Modigliani and Miller (1958). The model predicts that leverage and sales-to-capital ratios decrease but firm size and capital stock increase with the subjective discount factor of the firm’s manager if there are taxes and bankruptcy costs. The empirical analysis supports these predictions.
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the cost of capital and optimal Financing Policy in a dynamic setting
Social Science Research Network, 2014Co-Authors: Sigitas KarpaviciusAbstract:This paper revisits the Modigliani-Miller propositions on the optimal Financing Policy and cost of capital in a dynamic setting. In an environment without taxes and bankruptcy costs, the results are generally consistent with Modigliani and Miller Propositions 1 and 2. However, the first proposition should be presented and interpreted more carefully, as given firm characteristics, there is only one optimal capital structure. Thus, a firm's capital structure is relevant. A relaxation of assumptions about either taxes or bankruptcy costs leads to conclusions that are generally different from those in Modigliani and Miller (1958). The model predicts that leverage and sales-to-capital ratios decrease but firm size and capital stock increase with the subjective discount factor of the firm's manager if there are taxes and bankruptcy costs. The empirical analysis supports these predictions.
Valery Ridde - One of the best experts on this subject based on the ideXlab platform.
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a scoping review of theories and conceptual frameworks used to analyse health Financing Policy processes in sub saharan africa
Health Policy and Planning, 2021Co-Authors: Catherine M Jones, Lara Gautier, Valery RiddeAbstract:Health Financing policies are critical Policy instruments to achieve Universal Health Coverage, and they constitute a key area in Policy analysis literature for the health Policy and systems research (HPSR) field. Previous reviews have shown that analyses of Policy change in low- and middle-income countries are under-theorized. This study aims to explore which theories and conceptual frameworks have been used in research on Policy processes of health Financing Policy in Sub-Saharan Africa and to identify challenges and lessons learned from their use. We conducted a scoping review of literature published in English and French between 2000-2017. We analyzed 23 papers selected as studies of health Financing policies in Sub-Saharan African countries using Policy process or health Policy-related theory or conceptual framework ex ante. Theories and frameworks used alone were from political science (35%), economics (9%), and health Policy and systems research field (17%). Thirtyfive percent of authors adopted a “do-it-yourself” (bricolage) approach combining theories and frameworks from within political science or between political science and HPSR. Kingdon’s multiple streams theory (22%), Grindle and Thomas’ arenas of conflict (26%), and Walt and Gilson’s Policy triangle (30%) were the most used. Authors select theories for their empirical relevance, methodological rational (comparison), availability of examples in literature, accessibility, and consensus. Authors cite few operational and analytical challenges in using theory. The hybridization, diversification, and expansion of mid-range Policy theories and conceptual frameworks used deductively in health Financing Policy reform research are issues for HPSR to consider. We make three recommendations for researchers in the HPSR field. Future research on health Financing Policy change processes in Sub-Saharan Africa should include reflection on learning and challenges for using Policy theories and frameworks in the context of HPSR.
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a study on the implementation fidelity of the performance based Financing Policy in burkina faso after 12 months
Archives of public health, 2018Co-Authors: Oriane Bodson, Ahmed Barro, Annemarie Turcottetremblay, Nestor Zante, Paulandre Some, Valery RiddeAbstract:Performance-based Financing (PBF) in the health sector has recently gained momentum in low- and middle-income countries (LMICs) as one of the ways forward for achieving Universal Health Coverage. The major principle underlying PBF is that health centers are remunerated based on the quantity and quality of services they provide. PBF has been operating in Burkina Faso since 2011, and as a pilot project since 2014 in 15 health districts randomly assigned into four different models, before an eventual scale-up. Despite the need for expeditious documentation of the impact of PBF, caution is advised to avoid adopting hasty conclusions. Above all, it is crucial to understand why and how an impact is produced or not. Our implementation fidelity study approached this inquiry by comparing, after 12 months of operation, the activities implemented against what was planned initially and will make it possible later to establish links with the Policy’s impacts. Our study compared, in 21 health centers from three health districts, the implementation of activities that were core to the process in terms of content, coverage, and temporality. Data were collected through document analysis, as well as from individual interviews and focus groups with key informants. In the first year of implementation, solid foundations were put in place for the intervention. Even so, implementation deficiencies and delays were observed with respect to certain performance auditing procedures, as well as in payments of PBF subsidies, which compromised the incentive-based rationale to some extent. Over next months, efforts should be made to adjust the intervention more closely to context and to the original planning.
Jin Wang - One of the best experts on this subject based on the ideXlab platform.
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employee treatment and firm leverage a test of the stakeholder theory of capital structure
Journal of Financial Economics, 2011Co-Authors: Keehong Bae, Junkoo Kang, Jin WangAbstract:We investigate the stakeholder theory of capital structure from the perspective of a firm's relations with its employees. We find that firms that treat their employees fairly (as measured by high employee[hyphen (true graphic)]friendly ratings) maintain low debt ratios. This result is robust to a variety of model specifications and endogeneity issues. The negative relation between leverage and a firm's ability to treat employees fairly is also evident when we measure its ability by whether it is included in the Fortune magazine list, "100 Best Companies to Work For." These results suggest that a firm's incentive or ability to offer fair employee treatment is an important determinant of its Financing Policy.
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employee treatment and firm leverage a test of the stakeholder theory of capital structure
Journal of Financial Economics, 2011Co-Authors: Keehong Bae, Junkoo Kang, Jin WangAbstract:Abstract We investigate the stakeholder theory of capital structure from the perspective of a firm’s relations with its employees. We find that firms that treat their employees fairly (as measured by high employee‐friendly ratings) maintain low debt ratios. This result is robust to a variety of model specifications and endogeneity issues. The negative relation between leverage and a firm’s ability to treat employees fairly is also evident when we measure its ability by whether it is included in the Fortune magazine list, “100 Best Companies to Work For.” These results suggest that a firm’s incentive or ability to offer fair employee treatment is an important determinant of its Financing Policy.
Joseph Kutzin - One of the best experts on this subject based on the ideXlab platform.
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health Financing for universal coverage and health system performance concepts and implications for Policy
Bulletin of The World Health Organization, 2013Co-Authors: Joseph KutzinAbstract:Unless the concept is clearly understood, "universal coverage" (or universal health coverage, UHC) can be used to justify practically any health Financing reform or scheme. This paper unpacks the definition of health Financing for universal coverage as used in the World Health Organization's World health report 2010 to show how UHC embodies specific health system goals and intermediate objectives and, broadly, how health Financing reforms can influence these. All countries seek to improve equity in the use of health services, service quality and financial protection for their populations. Hence, the pursuit of UHC is relevant to every country. Health Financing Policy is an integral part of efforts to move towards UHC, but for health Financing Policy to be aligned with the pursuit of UHC, health system reforms need to be aimed explicitly at improving coverage and the intermediate objectives linked to it, namely, efficiency, equity in health resource distribution and transparency and accountability. The unit of analysis for goals and objectives must be the population and health system as a whole. What matters is not how a particular Financing scheme affects its individual members, but rather, how it influences progress towards UHC at the population level. Concern only with specific schemes is incompatible with a universal coverage approach and may even undermine UHC, particularly in terms of equity. Conversely, if a scheme is fully oriented towards system-level goals and objectives, it can further progress towards UHC. Policy and Policy analysis need to shift from the scheme to the system level.
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bismarck meets beveridge on the silk road coordinating funding sources to create a universal health Financing system in kyrgyzstan
Bulletin of The World Health Organization, 2009Co-Authors: Joseph Kutzin, Ainura Ibraimova, Melitta Jakab, Sheila OdoughertyAbstract:Options for health Financing reform are often portrayed as a choice between general taxation (known as the Beveridge model) and social health insurance (known as the Bismarck model). Ten years of health Financing reform in Kyrgyzstan, since the introduction of its compulsory health insurance fund in 1997, provide an excellent example of why it is wrong to reduce health Financing Policy to a choice between the Beveridge and Bismarck models. Rather than fragment the system according to the insurance status of the population, as many other low- and middle-income countries have done, the Kyrgyz reforms were guided by the objective of having a single system for the entire population. Key features include the role and gradual development of the compulsory health insurance fund as the single purchaser of health-care services for the entire population using output-based payment methods, the complete restructuring of pooling arrangements from the former decentralized budgetary structure to a single national pool, and the establishment of an explicit benefit package. Central to the process was the transformation of the role of general budget revenues – the main source of public funding for health – from directly subsidizing the supply of services to subsidizing the purchase of services on behalf of the entire population by redirecting them into the health insurance fund. Through their approach to health Financing Policy, and pooling in particular, the Kyrgyz health reformers demonstrated that different sources of funds can be used in an explicitly complementary manner to enable the creation of a unified, universal system.