Browsing by Author "Barros, Victor"
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- Corporate tax avoidance and ex ante equity cost of capital in EuropePublication . Pulido, Matilde; Barros, VictorThe aim of this paper is to study the longstanding relationship between corporate tax avoidance and ex ante equity cost of capital in Europe, taking into consideration country specific characteristics, which are essential in a context of corporate tax competition. We find that investors apprehend tax avoidance differently at distinct levels of tax avoidance. We provide strong evidence that as low tax avoidance firms engage in greater tax avoidance, the ex ante equity cost of capital decreases. On the contrary, when high-tax avoidance firms undertake greater levels of tax avoidance, the ex ante equity cost of capital appears to increase. The benefits for firms engaged in lower tax avoidance are greater from 2008 onwards, during the period of financial crisis. These results confirm that in Europe a non-linear convex relationship exists between tax avoidance and ex ante equity cost of capital. Finally, we explore the impact of institutional characteristics and results suggest that in English common law countries the effect of corporate tax avoidance on ex ante equity cost of capital appears to be lower than that in other legal origins1
- Corporate taxes and high-quality entrepreneurshipPublication . Venâncio, Ana; Barros, Victor; Raposo, ClaraWe examine the impact of corporate taxation on entrepreneurship, using a quasi-natural experiment, which substantially reduced the corporate tax rate for start-ups located in inland municipalities in Portugal. Using a difference-in-differences approach and IV regression, we find that the tax reform increased firm entry and new firm job creation. The entrepreneurs who took advantage of this tax reform are relatively older, and are better-educated individuals. Their start-ups are relatively larger, more productive, and are more likely to survive the first 3 years. These findings suggest that corporate taxation is an imperative constraint for entrepreneurship, particularly for high-quality entrepreneurs. These better-educated individuals find it easier to overcome the hurdles of tax legislation and to make use of the opportunities created by a specific tax reform.
- Despovoamento, desenvolvimento rural e apego à terra : o caso de uma pequena aldeia de Trás-os-MontesPublication . Lopes, João Carlos; Barros, VictorNeste documento de trabalho apresenta-se um estudo de caso de uma pequena aldeia transmontana, do distrito de Bragança, através de uma perspetiva multidisciplinar, envolvendo, entre outras, as dimensões demográfica, económica, social, cultural e religiosa. Trata-se de um núcleo populacional em acelerado processo de despovoamento, iniciado com o fluxo migratório dos anos sessenta, sobretudo para o Brasil, e, nos anos setenta, para França e Alemanha, bem como para os centros urbanos de Porto, Lisboa e Aveiro, entre outros. Depois de um breve enquadramento histórico, geográfico e demográfico, usa-se uma base de dados original, e até agora não explorada, constituída pela lista de contributos para a festa anual da aldeia (nomes e valores dos donativos), complementada por informação adicional recolhida, in loco, junto dos respetivos mordomos e de outros habitantes conhecedores da realidade local, sobre a idade, local de residência, grau de escolaridade, profissão e dedicação (ou não) a atividades agrícolas. O principal objetivo do trabalho é comparar, a estes diversos níveis, a população residente na aldeia e a diáspora, que a ela continua ligada por laços familiares e afetivos, constituindo um ativo essencial para a resiliência deste território periférico, envelhecido e cada vez mais despovoado.
- Do activist shareholders influence a manager’s decisions on a firm’s dividend policy: A mixed-method studyPublication . Barros, Victor; Matos, Pedro Verga; Sarmento, Joaquim Miranda; Vieira, Pedro RinoActivist shareholders play an increasingly relevant role in management decisions, especially in their activities aimed to influence corporate decisions towards enhanced performance and profitability. However, the level of success of such strategies is not yet fully understood, as reported in the existing literature. Most of the literature has focused on performance, although other firms’ policies catch activist shareholders’ attention. A key strategic decision is precisely the dividend policy. In this paper, we assess the likelihood of a dividend payment and the time invariance of the dividend policy while controlling for firm-specific and market-specific effects. Our data cover the nonfinancial US-based firms targeted by activist shareholders in a large time span from 2000 to 2017. Taking both a quantitative econometric approach and a qualitative one (fsQCA), our findings support the claim that activist campaigns are positively associated with the likelihood of firms’ decisions to pay dividends, even if it occurs at the cost of higher volatility on the dividend level and payout ratio. Our findings also suggest that activist shareholders prefer to collect dividends in the years following the campaigns, arguably as a risk management mechanism.
- Do managers increase tax disclosure when corporate tax avoidance is high?Publication . Barros, Victor; Neves, João Carvalho dasThis paper aims to assess whether firms tend to increase tax disclosure when the level of tax avoidance is higher. The paper proposes a new index based on hand-collected data from annual reports of firms listed on eight European stock exchanges, which made it possible to distinguish between mandatory and voluntary tax disclosures. The empirical results show that firms engaged in greater tax avoidance disclose more mandatory information regarding income tax, while they do not disclose voluntary tax-related information when corporate tax avoidance increases. Our results also highlight that IAS 12 does not inhibit firms from following different disclosure practices, as significant variability among countries was found. Stricter lookup tables may shape the variability in tax disclosures and may also limit tax avoidance practices to influence disclosure of mandatory information regarding income tax.
- Does ESG affect the stability of dividend policies in Europe?Publication . Matos, Pedro Verga; Barros, Victor; Sarmento, Joaquim MirandaSustainability has become a significant issue for firms and investors throughout the world, although it cannot be attained if policies impact the stability of firms’ dividend policies. In this paper, we use data from the Stoxx Euro 600 firms from 2000 to 2019 and the ESG (environmental, social and governance) scores from Thomson Reuters to assess the relationship between ESG responsibility performances and the firm’s dividend policy. The results indicate that more sustainable firms exhibit a more stable dividend payout. This result is also valid when the ESG pillars are analysed, specifically, the environmental and governance pillars. The findings further suggest that higher ESG scores reveal better long-term alignment with shareholders and other stakeholders due to more proportionally stable profit sharing.
- Drivers of the tax effort : evidence from a large panelPublication . Barros, Victor; Jalles, João Tovar; Sarmento, Joaquim MirandaThis paper extends previous literature by assessing the drivers of tax effort in a large panel of 122 countries over the period 1980 to 2017 and refining the analysis to regions, periods, income group, and economic development level. Our focus is on five blocks of determinants, namely: economic, fiscal, openness, structural, and political. We find that tax effort is influenced by all blocks, although results differ per income group. Tax effort in advanced economies is driven by all blocks of drivers, except political variables, while openness, structural, and political blocks prevail in developing economies. There is no consistency regarding the determinants across the four regions (Latin America, Africa, Europe and Asia). We also find that during the first two decades under analysis, tax effort is mainly associated with both higher levels of countries’ tax revenues and the role of the agricultural sector in the economy, while from 1999 onwards the determinants are mainly driven by left-wing ruling governments and the economic and fiscal blocks of variables. Our results are robust for a battery of sensitivity and robustness tests. Taken all together, our findings suggest the existence of heterogeneous impacts, which implies that policies resulting in improvements in the level of tax effort can affect countries in different ways.
- ESG performance and firms’ business and geographical diversification : An empirical approachPublication . Barros, Victor; Matos, Pedro Verga; Sarmento, Joaquim Miranda; Vieira, Pedro RinoDiversification is primarily associated with improved performance, although the increasing complexity of conglomerates may offset these benefits. ESG scores and their dimensions serve as performance indicators and may also be risk components influencing cash flows. This study aims to investigate the relationship between ESG performance and firms’ diversification. We hand-collected data on business segments and geographical diversification from the constituents of the Euro Stoxx 50 over a large period, from 2002 to 2020. Our findings indicate that geographical diversification does not influence ESG variability. However, better ESG scores are observed in firms with more business segments, that do not have a dominant business segment with a significant role in the firm nor are concentrated in the most representative business segments. However, better ESG scores are also associated with greater asymmetry in the contribution of each business segment to the entire group. Collectively, we shed light on the importance of business diversification in improving sustainability performance across ESG dimensions.
- High-tech firms : Dividend policy in a context of sustainability and technological changePublication . Barros, Victor; Verga, Matos, Pedro; Sarmento, Joaquim Miranda; Vieira, Pedro RinoWe examine whether the dividend policy of high-tech firms is explained by ESG performance in the triple ESG components (environmental, social, and governance). Using a panel of US-based firms in the technology sector from 2002 to 2021, we find that better ESG scores are linked with a higher likelihood of dividend payments, stability of the amount paid, and implied shareholder returns from the dividend yield. R&D intensity is a constraint of dividend policies, although ESG scores mitigate this adverse effect by helping increase the likelihood of dividend payments. Overall, our findings highlight the role of ESG scores in enabling high-tech firms to implement dividend policies that yield stable returns to investors.
- Impacto da fiscalidade nas decisões de fusões e aquisições em PortugalPublication . Barros, Victor; Neves, João Carlos Carvalho dasEste estudo pretende determinar se a fiscalidade influenciou as decisões dos gestores das empresas compradoras nas fusões e aquisições (F&A) realizadas em Portugal entre 2000 e 2009. Após confirmar as F&A ocorridas em Portugal no período seleccionado, a metodologia de investigação consistiu no envio de um inquérito por questionário às empresas seleccionadas. Por ter sido possível categorizar as respostas obtidas por grupos (empresas nacionais e estrangeiras; cotadas e não cotadas; grandes empresas e pequenas e médias empresas (PME); envolvidas em 3 ou menos F&A e em 4 ou mais) foram efectuadas análises entre grupos e em termos agregados. No geral, os resultados obtidos sugerem que a fiscalidade teve pouca importância nas decisões de F&A. Os três principais factores fiscais que influenciaram as decisões de F&A dos gestores respondentes foram a tributação dos dividendos, a transmissibilidade de créditos e de prejuízos fiscais e a tributação internacional. Contudo, entre grupos verificou-se uma diferença substancial para as PME, cujos gestores consideraram como factor fiscal mais importante nas decisões de F&A o sistema judicial tributário. Encontrou-se também algumas situações em que a fiscalidade em Portugal denota ser pouco competitiva em relação a outros países da União Europeia. Como resultado do estudo desenvolvido, foram ainda indicadas algumas recomendações de alteração ao sistema fiscal português de forma a incentivar as F&A.