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Full-Text Articles in Corporate Finance

Subsidiary Governance And Corporate Tax Planning: The Effect Of Parent-Subsidiary Common Directors And Offficers, Xin Wang, Yongxin Xu, Liandong Zhang, Gaoping Zheng Sep 2022

Subsidiary Governance And Corporate Tax Planning: The Effect Of Parent-Subsidiary Common Directors And Offficers, Xin Wang, Yongxin Xu, Liandong Zhang, Gaoping Zheng

Research Collection School Of Accountancy

Top executives of the parent company often take positions as the directors and officers (D&Os) of subsidiaries. These parent-subsidiary common D&Os have better access to subsidiary information and can exert more influence over subsidiary operations. Therefore they can better identify tax-planning opportunities and coordinate tax arrangements. Using the mandatory disclosure of top executives' subsidiary positions for Chinese listed firms, we find that effective income tax rate is lower for firms with common D&Os. The tax-saving effect is stronger for firms with more intangible assets and with related-party transactions involving subsidiaries. The effect is also stronger when common D&Os have positions …

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Strategic Disclosure And Debt Covenant Violation, Thomas Bourveau, Derrald Stice, Rencheng Wang Sep 2022

Strategic Disclosure And Debt Covenant Violation, Thomas Bourveau, Derrald Stice, Rencheng Wang

Research Collection School Of Accountancy

This study examines how managers change their forecasting behavior as a debt covenant violation approaches. Using a sample of firms that disclose a debt covenant violation (DCV) in their financial statements, we find that management forecasts are more optimistic in the period leading up to a DCV, and this result is not driven by managers’ unintentional forecast bias. Additionally, we find that managers who are more optimistic in their forecasts also take on more risk and increase dividend payouts before violations, consistent with managers strategically using earnings forecasts to justify their activities favorable to shareholders but likely to be curtailed …

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Working Capital Management Of Manufacturing Companies In Bangladesh: What Factors Make Significant Impact?, Sumaiya Zaman Sep 2022

Working Capital Management Of Manufacturing Companies In Bangladesh: What Factors Make Significant Impact?, Sumaiya Zaman

Journal of Global Business Insights

The paper aims to determine factors that make a significant impact on working capital management of a manufacturing company in Bangladesh. Of 221 service and manufacturing firms listed on the Dhaka Stock Exchange, 109 companies are chosen based on data availability for the five-year period 2014-2018. The study examines literature on working capital management and tests theory on manufacturing companies listed on the Dhaka Stock Exchange. Cash conversion cycle is used as a measurement of working capital efficiency. Financial ratios representing six aspects of company's financial performance are taken as explanatory variables. They represent company asset management, debt structure, growth, …

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Corporate Social Responsibility Influence On Organizational Performance: Moderating Effect Of Corporate Reputation Performance: Moderating Effect Of Corporate Reputation, Eti Jain, Anuja Shukla, Shiv K. Sharma, Arvind Kumar Aug 2022

Corporate Social Responsibility Influence On Organizational Performance: Moderating Effect Of Corporate Reputation Performance: Moderating Effect Of Corporate Reputation, Eti Jain, Anuja Shukla, Shiv K. Sharma, Arvind Kumar

Management Dynamics

No abstract provided.

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Three Essays On Insider Trading, Haoyang Xiong Aug 2022

Three Essays On Insider Trading, Haoyang Xiong

Theses and Dissertations

In the first essay we study whether and how personal off-the-job managerial indiscretions impact corporate insiders’ trading behavior. We find that executives accused of personal indiscretions earn significantly higher abnormal returns from their insider purchases and sales in a 15-day window around each trade. The results are robust to matched sample analyses. Further, insiders’ historical trading pattern or corporate culture has less explanatory power than personal attributes. We also document that exposure of these indiscretions to the public provides a disciplinary effect, as insider trading profits significantly drop following the announcement of an indiscretion, despite this drop being temporary. Corporate …

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Essays On Insider Trading, Innovation, And Political Economy, Jiawei Chen Aug 2022

Essays On Insider Trading, Innovation, And Political Economy, Jiawei Chen

Theses and Dissertations

I study how insider trading interacts with the political economy, regulators, and other corporate governance mechanisms. In the first section, I examine the impact of insider trading restriction enforcement on firm innovation. U. S. Securities and Exchange Commission enforcement actions are intended to protect investors and limit expropriation by firm insiders, but enforcement could impact insiders’ incentives to contribute to value enhancing activities. Therefore, I explore how corporate innovation and performance respond to insider trading restrictions imposed by firms and regulators. Using manually collected data on SEC indictments against corporate insiders, I document more innovative activity following external insider trading …

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How To Create Cash Flows That Give A Priori Irrs?, Charlie Charoenwong, Xinxin Li, Chee K. Ng Aug 2022

How To Create Cash Flows That Give A Priori Irrs?, Charlie Charoenwong, Xinxin Li, Chee K. Ng

Southwestern Business Administration Journal

We illustrate algebraically the way to numerically derive the cash flows of an investment project yielding a set of desired IRRs. This is significant given the dearth of practice questions with the appropriate cash flow numbers, and their corresponding sign, in widely adopted Finance textbooks that will allow students to find multiple IRRs as learning exercises. The note serves to fill that void by allowing the readers to change the IRR inputs in an Excel spreadsheet and have the corresponding cash flows output ready for an assignment. Instructors can use the Excel codes to create different cash flows that yield …

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Sustainability: Jobs And Skills For The Accountancy Profession, Jiwei Wang, Holly I. Yang, Liandong Zhang Aug 2022

Sustainability: Jobs And Skills For The Accountancy Profession, Jiwei Wang, Holly I. Yang, Liandong Zhang

Research Collection School Of Accountancy

Sustainability is a megatrend that is changing the way we think about business and offering new opportunities and jobs for the accountancy sector. At the 26th Conference of the Parties (COP26), also known as the United Nations Climate Change Conference, the international business community was galvanised into action. Singapore, too, has intensified its sustainability plans with the Singapore Green Plan 2030

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Bank Ownership And Decline In Loan Growth Due To The Pandemic, Ruthana Bitia, Zuliani Dalimunthe Jul 2022

Bank Ownership And Decline In Loan Growth Due To The Pandemic, Ruthana Bitia, Zuliani Dalimunthe

The Indonesian Capital Market Review

This study aims to analyze the effect of bank ownership structure on loan growth before and during the pandemic. Specifically, we developed four models to capture different loan types provided in the Indonesian banking system; working capital, investment, consumer, and total loan growth. This study used 150 observations of commercial banks for 2019 (before the pandemic) and 2020 (during the pandemic). We conducted the regression method to test hypotheses. The main finding of this study was that foreign banks’ consumer credit growth significantly lower than domestic banks. Similar findings occurred for other types of loans, and this conclusion has controlled …

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“Fiscal Trap”, The Case Of Greece, Titos Ritsatos Jul 2022

“Fiscal Trap”, The Case Of Greece, Titos Ritsatos

Southern University College of Business E-Journal

Present research aims at the introduction of the term “Fiscal Trap” in economic literature, as a comprehensive definition of the economic situation in which any available combination of fiscal-only policy measures (tax increases and austerity measures), would fail to fulfill fiscal targets during periods of recession. Using recent experience from the case of Greece, an ex-post evaluation of adopted policy effectiveness is pursued. Fiscal austerity and increased taxation enforced in Greece during the years 2009-2012, resulted in decreased tax revenues, lower GDP and increased debt-to-GDP ratio. In order to slip away from the vicious cycle generated by austerity and tax …

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The Terrorist Laffer Curve:Rationality And Insurgency In Iraq, 2004-2008, Dennis S. Edwards Jul 2022

The Terrorist Laffer Curve:Rationality And Insurgency In Iraq, 2004-2008, Dennis S. Edwards

Southern University College of Business E-Journal

While the original framework by Arthur Laffer focused on tax rates and the resulting revenue from such taxation, the Laffer curve has been applied to other studies in behavior as well. This paper details evidence of a Laffer curve in Iraq with respect to terrorist violence and Iraqi public support of that violence against the U.S.-led coalition forces. As insurgents began killing more Iraqi citizens in their attacks on U.S.-led forces, the increased lethality caused initial support of such violence to erode. As a result, the high-level terrorist hierarchy has suggested that its operatives reduce lethality and indiscriminate bombings.

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Equity Market Structure And The Persistence Of Unsolved Problems: A Microstructure Perspective, Robert A. Schwartz, James Ross, Deniz Ozenbas Jul 2022

Equity Market Structure And The Persistence Of Unsolved Problems: A Microstructure Perspective, Robert A. Schwartz, James Ross, Deniz Ozenbas

Department of Accounting and Finance Faculty Scholarship and Creative Works

This article presents a brief historical perspective on the evolution of equity market structure and considers implications microstructure analysis has had for improving market structure. Since the 1975 Securities Acts Amendments mandated the development of a National Market System, the robust growth of institutional investing and the impact of striking technological change have been transformative. Yet, market impact costs and price discovery noise continue to accentuate short-period returns variance, and the article presents empirical evidence of how sizable that accentuation is. In dealing with this problem, the authors focus on the rules that govern how orders are integrated together and …

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The Return Of The Call Auction, Deniz Ozenbas, Robert A. Schwartz Jul 2022

The Return Of The Call Auction, Deniz Ozenbas, Robert A. Schwartz

Department of Accounting and Finance Faculty Scholarship and Creative Works

A call auction is a form of trading that died out in the precomputer age but has made its reentrance in electronic markets and is currently a significant component of major stock markets globally. In contrast with a continuous market in which a transaction is made any time a buy and a sell order meet or cross in price, call auctions batch orders together for execution in multilateral trades at specific points in time. The electronic call, an important innovation in market structure, has unique benefits concerning liquidity provision, intraday volatility control, and price discovery accuracy. NASDAQ introduced electronic calls …

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Contracting With Controllable Risk, Christopher S. Armstrong, Stephen A. Glaeser, Sterling Huang Jul 2022

Contracting With Controllable Risk, Christopher S. Armstrong, Stephen A. Glaeser, Sterling Huang

Research Collection School Of Accountancy

We examine how executives' ability to control their firms' exposure to risk affects the design of their incentive-compensation contracts. Our natural experimental evidence shows that exchange-traded weather derivatives allow executives to control their firms' exposure to weather risk. Once these derivatives became available, those executives who use them to hedge experience relative reductions in their total compensation and equity incentives. The decline in compensation is consistent with a reduction in the risk premium that executives receive for exposure to weather risk. The decline in equity incentives is consistent with the relation between risk and incentives shifting in a complementary direction …

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Impact Of Capital Structure On Performance Of Microfinance Institutions, Rukhsana Bibi, Naveed Raza, Attiya Yasmin Javid Jun 2022

Impact Of Capital Structure On Performance Of Microfinance Institutions, Rukhsana Bibi, Naveed Raza, Attiya Yasmin Javid

Business Review

Microfinance institutions play a crucial role in poverty alleviation and provide financial services to low-income households. Microfinance growth rate is quite high in Asia but an undesirable development is achieved due to high borrowing cost and inadequate reserves. For microfinance institutions, there is a need to determine a suitable mix of financing to stay sustainable. This study examines the impact of capital structure on the performance of microfinance institutions in Asia. Using a unique unbalanced panel data set of 253 microfinance institutions from 2000 to 2015, performance is measured in terms of sustainability, financial performance, social performance and efficiency. It …

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Evaluating The Effectiveness Of Tax Objection Review In Indonesia’S Tax Authority, Yuli Trisnawati, Siti Nuryanah Jun 2022

Evaluating The Effectiveness Of Tax Objection Review In Indonesia’S Tax Authority, Yuli Trisnawati, Siti Nuryanah

Jurnal Akuntansi dan Keuangan Indonesia

An evaluation of the effectiveness of tax objection review by the Directorate General of Taxes (DGT) is required due to the increasing number of tax disputes that continue to litigation and a low winning rate for DGT in tax court (approximately 40%). This study aims to analyze the effectiveness of reviewing tax objections at DGT using Campbell's Effectiveness Theory (1989) with criteria of programs and goals success, program satisfaction, inputs and outputs conformity, and overall goal achievement. This is case study research with a qualitative method presented in a descriptive analysis. Data was collected through documentation, interviews, and satisfaction surveys. …

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Biodiversity Disclosure Of Indonesian Companies And The Role Of The Board Of Commissioners, Ahmad Hambali, Desi Adhariani Jun 2022

Biodiversity Disclosure Of Indonesian Companies And The Role Of The Board Of Commissioners, Ahmad Hambali, Desi Adhariani

Jurnal Akuntansi dan Keuangan Indonesia

The environmental damage that occurs on a large scale has an impact on reducing biodiversity. Biodiversity has an important role that is useful for human life and plays a central role in economic development. This condition makes various parties aware of their role in preventing further damage. Companies, whether directly or indirectly, owe a great deal to the environment. This study seeks to examine the role of the Board of Commissioners as proxied by the size of the Board of Commissioners, the proportion of Independent Boards, and the proportion of women on the Board of Commissioners as a corporate governance …

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Central Bank Independence: An Examination Of Monetary And Economic Stability Through Ordinary And Extraordinary Times, Carroll Griffin, Yun Cheng Jun 2022

Central Bank Independence: An Examination Of Monetary And Economic Stability Through Ordinary And Extraordinary Times, Carroll Griffin, Yun Cheng

Southern University College of Business E-Journal

The idea of central bank independence (CBI) has been widely accepted over the last several decades by many countries around the world, both developed and developing. As such, many countries around the world granted autonomy to their central banks during the 1980s and 1990s. Although the majority of past studies have primarily examined the impact of central bank independence on inflation, there is only now sufficient date to empirically determine whether many of these claims are true. This study examines central bank independence over the long-term (1960 to 2015) to determine to what extent central bank independence has helped to …

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Guess Who Is Not Using Mobile Money In Sub-Saharan Africa?, Aparna Gosavi Jun 2022

Guess Who Is Not Using Mobile Money In Sub-Saharan Africa?, Aparna Gosavi

Southern University College of Business E-Journal

Mobile money, which is a mobile-phone-based service, sends and/or receives money across a wide geographical area with just a touch of a mobile-phone button. This particular financial product was initially introduced in Kenya in the early part of 2007. Within the first six months of its introduction in Kenya, more than two million people enrolled for the service, partly because the utility emerged as a handy tool for urban migrants to send money back home to their families who resided in villages. This overwhelming response to the service was mainly because of its convenience, safety, and speed. Now, in Sub-Saharan …

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Impairment Recognition And Revaluation– China Publicly Listed Companies, Ying Wang Jun 2022

Impairment Recognition And Revaluation– China Publicly Listed Companies, Ying Wang

Southern University College of Business E-Journal

The advent of SFAS 142 and IAS 36 regarding handling of asset impairment has spawned research into how these standards influence whether an impairment loss is recorded. Deferred tax items in China have three major components: temporary tax and financial reporting differences in depreciation; impairment losses; and previous losses, which can be carried forward for five years for tax purposes. While the temporary differences in depreciation typically defer taxes and create deferred tax liabilities, impairment losses and previous losses create deferred tax assets because they are not deductible in the current period for tax purposes. A deferred tax asset is …

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Analysis Of The Comovement Of Unemployment In Midwestern States, Tammy Rapp Parker Jun 2022

Analysis Of The Comovement Of Unemployment In Midwestern States, Tammy Rapp Parker

Southern University College of Business E-Journal

The current paper investigates the interrelatedness of twelve Midwestern states through the comovement of unemployment rates. Due to their geographic location, we would anticipate similarities and comovement among macroeconomic variables. The results show that although most of the bivariate pairings do show a relationship. Five of the sixty-five pairings show no indication of cointegration among their unemployment rates. Each of these five pairings includes North Dakota. The paper investigates geographic and socioeconomic similarities between these states to try to explain these results.

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Baumol And Bowen Cost Effects In Research Universities, Robert E. Martin Jun 2022

Baumol And Bowen Cost Effects In Research Universities, Robert E. Martin

Southern University College of Business E-Journal

We estimate cost models for both public and private research universities and use partial differentials from these models to estimate different cost effects. The results suggest both Baumol’s cost disease and Bowen’s revenue theory drive cost higher and that Bowen effects are larger than Baumol effects. Tight revenue since 2008 reversed some declines in productivity and accelerated the trend in economizing on the use of tenure track faculty. This behavior under loose and tight revenue constraints is consistent with Bowen’s revenue theory.

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Credit Market Innovations And Gross Domestic Income, Ellis Heath Jun 2022

Credit Market Innovations And Gross Domestic Income, Ellis Heath

Southern University College of Business E-Journal

In this paper I compare the effects of different credit variables on real output in the US. However, instead of using real Gross Domestic Product as a proxy for real output, I use real Gross Domestic Income. I use a VAR framework with generalized impulse response functions and generalized variance decompositions. I look at a credit aggregate and different credit spreads. I find that shocks to some credit variables can have significant effects on real output; the reaction, however, is a temporary one. Specifically, measures of the risk premium and the term premium have the most importance in explaining innovations …

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Tax Management, Ownership Structure And Corporate Governance, Ying Wang, Scott Butterfield Jun 2022

Tax Management, Ownership Structure And Corporate Governance, Ying Wang, Scott Butterfield

Southern University College of Business E-Journal

We use 2010-2018 publicly listed Chinese company data to analyze how ownership structure and corporate governance affects tax management. Our results indicate that diverse ownership structure might lower a company’s tax rates, whereas traditional corporate governance measures, such as board size, independent board member percentage and duality of CEO serving as chair do not affect tax.

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2017 Tax Cuts And Corporate Investment And Financing Decisions: An Empirical Investigation, Rakesh Duggal Jun 2022

2017 Tax Cuts And Corporate Investment And Financing Decisions: An Empirical Investigation, Rakesh Duggal

Southern University College of Business E-Journal

The Tax Cuts and Jobs Act of 1917 (TCJA) amended the Internal Revenue Code of 1986 and significantly lowered the corporate tax rate, in addition to providing other tax incentives to spur corporate investments. The TCJA has the potential to impact corporate cash flows and corporate investment and financing decisions. In response to the TCJA, firms could enhance their capital expenditure budgets, return excess capital to shareholders, and/or hold excess capital for better opportunities in the future. Using S&P 500 firms as a sample, this study finds no statistical difference in the actual corporate taxes paid in the post-and pre-TCJA …

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Fabrication Runtime Decision For A Hybrid System Incorporating Probabilistic Breakdowns, Scrap, And Overtime, Yuan Shyi Peter Chiu, Yunsen Wang, Tsu Ming Yeh, Singa Wang Chiu Jun 2022

Fabrication Runtime Decision For A Hybrid System Incorporating Probabilistic Breakdowns, Scrap, And Overtime, Yuan Shyi Peter Chiu, Yunsen Wang, Tsu Ming Yeh, Singa Wang Chiu

Department of Accounting and Finance Faculty Scholarship and Creative Works

Manufacturers today need to optimize their fabrication runtime decision by meeting short customer order due dates externally and managing the potentially unreliable machines and manufacturing processes internally. Outsourcing and overtime are commonly utilized strategies to expedite fabricating time. Additionally, detailed analyses and necessary actions on inevitable product defects (i.e., removal of scraps) and equipment breakdowns (such as machine repairing) are prerequisites to fabrication runtime planning. Motivated by assisting today’s manufacturers decide the best batch runtime plan under the situations mentioned above, this study applies mathematical modeling to a hybrid fabrication problem that incorporates partial overtime and outsourcing, inevitable product defects, …

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Managerial Trustworthiness And Buybacks, Sterling Huang, Kaisa Snellman, Theo Vermaelen Jun 2022

Managerial Trustworthiness And Buybacks, Sterling Huang, Kaisa Snellman, Theo Vermaelen

Research Collection School Of Accountancy

CEO trustworthiness is positively related to long-term excess returns after buyback announcements. When the CEO is trustworthy, statements that the stock is undervalued are more credible. CEO trustworthiness is initially measured by the extent to which people in the county where the company headquarters is located trust each other. Further, the positive impact of trustworthiness on excess returns is higher when the CEO has been a long-term resident of a high-trust county, and correspondingly, trustworthy CEOs are less likely to be accused of financial misreporting. Our conclusions are confirmed when we use alternative measures of trustworthiness such as employee trust …

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Short Interest And Corporate Investment: Evidence From Supply Chain Partners, Xia Chen, Guojin Gong, Shuqing Luo Jun 2022

Short Interest And Corporate Investment: Evidence From Supply Chain Partners, Xia Chen, Guojin Gong, Shuqing Luo

Research Collection School Of Accountancy

Short interest contains valuable information about a firm’s business fundamentals. We investigate whether such information affects business partners’ real investment decisions in the supply-chain setting. We predict and find that a supplier’s future investments (including inventory, R&D, and tangible asset investments) decrease with its customer’s current short interest. This negative relation is stronger when the supplier faces greater difficulty in assessing its customer’s business fundamentals and when short interest is more likely to indicate longlasting deterioration in the customer’s fundamentals. Additional analysis does not support the alternative explanation that the supplier adjusts investments in response to unfavorable information obtained via …

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Active Independent Directors And Earnings Quality, Yuanto Kusnadi, Bin Srinidhi Jun 2022

Active Independent Directors And Earnings Quality, Yuanto Kusnadi, Bin Srinidhi

Research Collection School Of Accountancy

We examine the relationship between active independent directors and earnings quality for U.S. firms. We construct measures that proxy for activeness of independent directors and find that the proportion of active independent directors is under half on average. Our finding shows that earnings quality increases with the percentage of active independent directors on the board. Once the active independent directors are separated out, the other independent directors do not have any effect on earnings quality. This finding supports the hypothesis that the activeness of independent directors is incrementally significant over just the proportion of independent directors for the quality of …

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An Automation Tax- Adopt With Caution, Vincent Ooi Jun 2022

An Automation Tax- Adopt With Caution, Vincent Ooi

Research Collection Yong Pung How School Of Law

The post highlights three main issues that may result from the rapid and widespread automation of jobs: 1) declining tax revenues; 2) inequitable distribution of gains and losses from automation; and 3) social costs of job displacement, such as social support and retraining programmes for displaced workers.An automation tax may be imposed on a temporary basis to manage (slow) the rate of displacement of workers due to the adoption of automation technologies, but should not be a permanent feature. Otherwise, there will be a risk of loss of competitiveness in the long-term, possibly resulting in even greater economic harm.One main …

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