Intended and unintended consequences of mandatory IFRS adoption: A review of extant evidence and suggestions for future research

This paper discusses empirical evidence on the economic consequences of mandatory adoption of International Financial Reporting Standards (IFRS) in the European Union (EU) and provides suggestions on how future research can add to our understanding of these effects. Based on the explicitly stated objectives of the EU‟s so-called „IAS Regulation‟, we distinguish between intended and unintended consequences of mandatory IFRS adoption. Empirical research on the intended consequences generally fails to document an increase in the comparability or transparency of financial statements. In contrast, there is rich and almost unanimous evidence of positive effects on capital markets and at the macroeconomic level. We argue that certain research design issues are likely to contribute to this apparent mismatch in findings and we suggest areas for future research to address it. The literature investigating unintended consequences of mandatory IFRS adoption is still in its infancy. However, extant empirical evidence and insights from non-IFRS settings suggest that mandatory IFRS adoption has the potential to materially affect contractual outcomes. We conclude that both the intended and the unintended consequences deserve further scrutiny to assess the costs and benefits of mandatory IFRS adoption, which may help provide a basis for evaluating the effectiveness of the IAS Regulation. We provide specific guidance for future research in this field.International accounting, IFRS adoption, economic consequences, contracting, regulation, review

Climate change adaptation strategies within the framework of the German "Energiewende": Is there a need for government interventions and legal obligations?

The option of adapting to climate change is becoming more important in climate change policy. Hence, responding to climate change now involves both mitigation to address the cause and adaptation as a response to already ongoing or expected changes. These changes are also of relevance for the energy sector in Germany. An energy sector that in the course of the German "Energiewende", also has to deal with a fundamental shift in energy supply from fossil fuel to renewable energies in the next decades. Based on a synthesis of the current knowledge regarding the possible influences of climate change on the German energy sector along its value-added chain, the paper points out, that the possible impacts of a changing climate should be taken into account in the upcoming infrastructure projects in the course of the Energiewende. The main question here is, whether adaptation options will be implemented voluntarily by companies or not. The paper argues that this has to be the case, when the measure is a private good. If, on the contrary, the measure is a public good, additional incentives are needed. For the German energy sector, the paper shows, that governmental intervention are for example justifiable regarding measures to adapt the grid infrastructure as a critical infrastructure that needs to be protected against current and future impacts of climate change

Shifting the tax burden from labor to property: The case of Germany

Contrary to frequent recommendations of the public finance literature and international institutions, a persistently high tax wedge on labor is observed in Europe. At the same time, the scope for shifting taxes from labor to more growth-friendly revenue sources appears underused in many European countries. This motivates our simulation of a revenue-neutral property tax reform for Germany, a country in which tax receipts from land are particularly low. More precisely, we assess by how much social insurance contributions (SIC) can be reduced when Germany switches from its current property tax scheme based on outdated cadastral values to one based on market property values. In order to make such a simulation possible, we match property related information with the input dataset of EUROMOD, the tax-benefit simulation model for the EU. Our results suggest that the implicit tax rate on labor could be reduced from currently 37,2% to 36,5%. Furthermore, we simulate different scenarios of the SIC reduction. Redistributive effects of these different scenarios tend to be modest and depend crucially on the design of the SIC reduction

Die Relevanz von Klimawandelfolgen für Kritische Infrastrukturen am Beispiel des deutschen Energiesektors

Von den möglichen Auswirkungen des Klimawandels wird eine Vielzahl gesellschaftlicher Bereiche betroffen sein, wobei dem Energiesektor dabei gesamtgesellschaftlich eine große Bedeutung zukommt. Zum einen ist die Energieinfrastruktur eine sogenannte Kritische Infrastruktur, denn ihr Ausfall oder ihre Beeinträchtigung kann zu nachhaltig wirkenden Versorgungsengpässen, erheblichen Störungen der öffentlichen Sicherheit oder anderen dramatischen Folgen führen. Zum anderen befindet sich der deutsche Energiesektor durch die Energiewende in einem umfassenden Transformationsprozess. Vor diesem Hintergrund werden im Rahmen der vorliegenden Untersuchung die bisherigen Aktivitäten und Publikationen zu möglichen Klimawandelfolgen für den deutschen Energiesektor ausgewertet. Hierbei werden sowohl die physischen Auswirkungen entlang der Wertschöpfungskette für die unterschiedlichen Energieträger diskutiert als auch die zentralen Studien zu den ökonomischen Konsequenzen dieser Betroffenheiten ausgewertet. Dabei zeigt sich, dass alle hier betrachteten Bereiche der Wertschöpfungskette zumeist negativ betroffen sein werden. Die wesentlichen Einflussfaktoren werden dabei das Wasserangebot, Extremwetterereignisse und steigende Durchschnittstemperaturen sein. Es wird auch deutlich, dass die zu erwartenden Auswirkungen des Klimawandels schon jetzt bei den anstehenden Infrastrukturmaßnahmen im Zuge der Energiewende Berücksichtigung finden sollten, so dass die Transformation der Energiesysteme auch zum Beseitigen entsprechender Schwachstellen genutzt werden kann

The Case of Labor Standards and International Framework Agreements

Although institutional work has recently attracted considerable attention from organization research, there is a surprising neglect of inter-organizational negotiations as a form of institutional work. This neglect is astonishing, since negotiations provide a unique opportunity both to study institutional change in settings characterized by diverging institutional logics and to illustrate how institutional constraints and strategic agency are linked in interaction processes. Based on a combination of the literature on institutional work and the theory of strategic negotiations, we examine in detail three illuminating negotiation processes taking place around International Framework Agreements on global labour standards. This examination reveals three types of (proto-)institutional outcomes produced by these processes: institutional creation, modification and stagnation. Whereas institutional creation and modification, albeit differing in quality, show how integrative negotiation practices of global unions might engage management in a joint endeavor for institutional change, institutional stagnation illuminates some of the pitfalls of negotiation work

Bargaining in the Photonics Industry

This paper investigates how path dependence may come about in inter- organizational networks. To do so, we focus our analysis on one particular type of network management practices – bargaining practices – and ask whether and how they can become path-dependent. Bargaining practices are recurrent activities through which network partners agree to identify and distribute their cooperative surplus. Targeting these practices, we first operationalize the core concepts of path dependence theory by deriving empirical indicators. We then use a ‘pattern matching’ approach to analyze whether these empirical indicators can be found in real bargaining practices. Empirically, we conduct three case studies of regional networks in the photonics industry. We use qualitative interviews and content analysis to reconstruct the development dynamics of their bargaining practices. A major finding is that network bargaining practices can indeed exhibit inter-organizational path dependencies. This paper contributes not only by operationalizing the theory of organizational path dependence but also by extending this theory to the network level of analysis

Adapting Energy Infrastructure to Climate Change – Is There a Need for Government Interventions and Legal Obligations within the German “Energiewende”?

AbstractThe energy sector is considered a critical infrastructure. Important questions to be answered are, how climate change will affect the security of energy provision in the future. Based on an analysis of the available relevant literature the major vulnerabilities of the German energy sector are identified. Focusing on power generation and grid infrastructure we analyze whether adaptation measures, if necessary, are taken voluntarily or if governmental interventions are needed and justifiable. We show that governmental interventions are justifiable regarding measures to adapt the grid infrastructure