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Publications
Journal Article
The Review of Financial Studies 32 (8): 3144–3180
Martin Jacob, Roni Michaely, Maximilian A. Müller (2019)
Subject(s)
Economics, politics and business environment; Finance, accounting and corporate governance
Keyword(s)
Investment, VAT, market power
JEL Code(s)
H25, G31, H24
Volume
32
Journal Pages
3144–3180
ISSN (Online)
1465-7368
ISSN (Print)
0893–9454
Journal Article
The Accounting Review 93 (4): 101–125
Inga Bethmann, Martin Jacob, Maximilian A. Müller (2018)
Subject(s)
Finance, accounting and corporate governance
Keyword(s)
Corporate taxation, tax policy, tax loss carryback, tax asymmetry, tax refunds, corporate investments, misallocation
JEL Code(s)
G31, H21, H25
Tax regimes treat losses and profits asymmetrically when profits are immediately taxed, but losses are not immediately refunded. We find that treating losses less asymmetrically by granting refunds less restrictively increases loss firms' investment: A third of the refund is invested and the rest is held as cash or returned to shareholders. However, the investment response is driven primarily by firms prone to engage in risky overinvestment. Consistent with the risk of misallocation, we find a delayed exit of low-productivity loss firms receiving less restrictive refunds, indicating potential distortion of the competitive selection of firms. This distortion also negatively affects aggregate output and productivity. Our results suggest that stimulating loss firms' investment with refunds unconditional on their future prospects comes at the risk of misallocation.
With the permission of the American Accounting Association
Volume
93
Journal Pages
101–125
Journal Article
The Review of Financial Studies 31 (4): 1265–1297
Matthias Breuer, Katharina Hombach, Maximilian A. Müller (2018)
Subject(s)
Finance, accounting and corporate governance
Keyword(s)
Regultion, disclosure, audit, banks
JEL Code(s)
G38, M41, M48
Volume
31
Journal Pages
1265–1297
ISSN (Online)
1465-7368
ISSN (Print)
0893–9454
Journal Article
Journal of Business Ethics 134 (4): 649–668
Lars Helge Haß, Sofia Johan, Maximilian A. Müller (2016)
Subject(s)
Finance, accounting and corporate governance
Keyword(s)
Corporate governance, tunneling, enforcement
JEL Code(s)
G15, G38, K22
This paper examines the effectiveness of public enforcement by studying the effects of regulatory intervention to curb tunneling through intercorporate loans in China. Specifically, we explore whether public enforcement efforts in 2006 (blacklisting and sanctions) resulted in less tunneling, and ultimately in increased performance for tunneling firms. We show that tunneling is among the dominant factors increasing the likelihood of becoming blacklisted. We also find that firms’ tunneling mechanisms decreased significantly after the regulatory shock, and that their performance increased significantly compared to non-tunneling firms after the regulatory shock. Finally, we find a positive market reaction to the public announcement of tunneling both for firms that have been blacklisted and other tunneling firms that are not blacklisted. Collectively, these results suggest that public enforcement in the presence of a credible threat succeeds in deterring the effect on tunneling behavior in China.
© Springer Science+Business Media Dordrecht 2014
Volume
134
Journal Pages
649–668
Journal Article
The Accounting Review 90 (6): 2411–2447
Maximilian A. Müller, Edward W. Riedl, Thorsten Sellhorn (2015)
Subject(s)
Finance, accounting and corporate governance
Keyword(s)
fair value, recognition versus disclosure, IFRS, investment property
This paper examines pricing differences across recognized and disclosed fair values. We build on prior literature by examining two theoretical causes of such differences: lower reliability of the disclosed information, and/or investors' higher related information processing costs. We examine European real estate firms reporting under International Financial Reporting Standards (IFRS), which require that fair values for investment properties, our sample firms' key operating asset, either be recognized on the balance sheet or disclosed in the footnotes. Consistent with prior research, we predict and find a lower association between equity prices and disclosed relative to recognized investment property fair values, reflecting a discount applied to disclosed fair values. We then predict and find that this discount is mitigated by lower information processing costs (proxied via high analyst following), and some support that it is also mitigated by higher reliability (proxied via use of external appraisals). These latter results are documented using subsample analyses to test one attribute (either information processing costs or reliability) while holding the other constant. Overall, these findings are consistent with fair value reliability and information processing costs providing complementary explanations for observed pricing discounts assessed on disclosed accounting amounts.
With the permission of the American Accounting Association
Volume
90
Journal Pages
2411–2447
Journal Article
Journal of Corporate Finance 34: 251–267
Lars Helge Haß, Maximilian A. Müller, Skrålan Vergauwe (2015)
Subject(s)
Economics, politics and business environment
Keyword(s)
Corporate fraud, tournament incentives, CEO pay gap
JEL Code(s)
J33, G30, M53
This paper identifies a new incentive for managers to engage in corporate fraud stemming from the relative performance evaluation feature of CEO promotion tournaments. We document higher propensities to engage in fraud for firms with strong tournament incentives (as proxied for by the CEO pay gap). We posit that the relative performance evaluation feature of CEO promotion tournaments creates incentives to manipulate performance, while the option-like character can motivate managers to engage in risky activities. We thereby extend previous corporate fraud literature that focuses mainly on equity-based incentives and reports mixed findings. Our results are robust to using different fraud samples, and controlling for other known determinants of fraud as well as manager skills.
Copyright © 2015 Elsevier B.V. All rights reserved.
Volume
34
Journal Pages
251–267