US States Business Incentives and Investment Efficiency of Domestic Firms: Is Monitoring Necessary? by Moon Kyung Cho - Texas A&M International University, United States
Pirzada, Kashan and Moon Kyung, Cho (2024) US States Business Incentives and Investment Efficiency of Domestic Firms: Is Monitoring Necessary? by Moon Kyung Cho - Texas A&M International University, United States. In: Interdisciplinary Perspectives on Accounting Conference 2024, 3-5 July 2024, Royal Holloway University of London. (Unpublished)
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Text (Discussant-IPA 2024)
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Abstract
PS 3.04 Accounting and Governance
Discussant: Kashan Pirzada – Birmingham City University, United Kingdom
Abstract:
Using the US data from 2004 to 2018, this study investigates whether and how various forms of state business incentives influenced investment efficiency of domestic firms. This study further elucidates the role of market-driven monitoring mechanisms (economic competition) versus firm-level monitoring mechanisms (corporate internal control systems) in conjunction with state business incentives and firm-level investment efficiency. I find that state business incentives (in the form of tax-based business incentives) provided by either the state or the federal government increase investment efficiency, whereas those provided by private sources decrease investment efficiency. In addition, sales- or asset-based economic competition have a negative impact on the relation between state business incentives and investment efficiency, whereas economic competition based on market size have a positive impact on this relation. Lastly, corporate internal control systems based on the Sarbanes-Oxley Act Sections 302 and 404 have a positive impact on the relationships between using indirect financing methods of supplying state business incentives and investment efficiency. This study provides evidence of the positive effects of equity-oriented state business incentives on firm-level investment efficiency and suggests careful selection of monitoring mechanisms enhancing firm-level investment efficiency in relation to state business incentives.
| Item Type: | Conference or Workshop Item (Speech) | ||||||
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| Subjects: | CAH17 - business and management > CAH17-01 - business and management > CAH17-01-08 - accounting | ||||||
| Divisions: | Faculty of Business, Law and Social Sciences > College of Accountancy, Finance and Economics | ||||||
| Depositing User: | Kashan Pirzada | ||||||
| Date Deposited: | 16 Jul 2024 13:13 | ||||||
| Last Modified: | 16 Jul 2024 13:13 | ||||||
| URI: | https://www.open-access.bcu.ac.uk/id/eprint/15644 |
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