PEGFA Research Seminars 2024: Heck & Liu

15th Feb 2024 5pm

Greenwich Campus

QM369

The Institute of Political Economy, Governance, Finance and Accountability (PEGFA) invites you to its Research Seminar Series 2024.

Our second Research Seminar will take place on 15th February at 5pm in QA369 and will feature PEGFA speakers Ines Heck and Dr Xianmin Liu.

The MS Teams meeting can be accessed here.

Dr Xianmin will be presenting "Green innovation and cross-border M&As: Evidence from China"

"Using a sample of cross-border mergers and acquisitions (CBMAs) attempted by Chinese listed firms between 2007 and 2021, we explore how green innovation affects emerging market economy (EME) bidders’ internationalization via CBMAs. We document that green innovative bidders are more likely to complete CBMA deals successfully, realize higher announcement abnormal returns in the short run, and achieve better post-merger operating performance in the long term. This better performance is achieved due to lower growth rate of carbon emission, superior environmental performance, reduced environmental compliance costs, and larger government subsidies after CBMA deal completion. Moreover, the positive effect of green innovation on deal completion probability and post-merger operating performance is more pronounced when host economies have greater physical climate risk, while weakened when host economies incur higher economic policy uncertainty. Brought together, these findings suggest that green innovative EME bidders positively respond to stakeholders’ concerns about climate change-related risks and environmental issues, thus contributing to the attainment of legitimacy and facilitating their internationalization via CBMAs."

Ines Heck will be discussing “A Progressive Excess Profits Tax for the European Union”

"We introduce a novel tax policy known as the Progressive Excess Profit Tax (PEPT) designed for implementation within the European Union. In addition to existing corporate taxation, the PEPT entails an additional 20% tax rate on `base' excess profits, which are defined as profits falling within a rate of return ranging from 10% to 15%. Furthermore, it imposes an additional 40% tax rate on `super' excess profits, which encompass profits exceeding a rate of return of 15%. We use ORBIS firm level data for firms above an operating revenue (turnover) of €80 million or more to estimate an extra EU-level revenue of €126 billion for the year 2022, in addition to the existing corporate tax income. This constitutes approximately 0.8% of the European Union's GDP and roughly 1.6% of the collective government expenditures of EU member states, equating to €280 for each EU citizen. EU member states possess the necessary tools, information, and legal authority to enforce the PEPT, with the potential for coordinated efforts at the European level. Importantly, this proposal effectively curbs tax avoidance by taxing firms based on their sales location rather than their legal registration, thus limiting their ability to relocate profits to low-tax jurisdictions to evade taxation. Using Country-by-Country (CbC), we apportion revenues to countries, and only the share of revenue generated in a country is considered for the tax base calculation. Moreover, this tax policy is designed to not deter investment, as firms can still attain a 10% return on assets without incurring additional taxes. Even in the absence of global coordination, the report demonstrates that the European Union has the capacity to unilaterally implement the PEPT."

We look forward to seeing you there!

Please find the entire programme for this year's Research Seminar Series here.

BOOKING REQUIRED

Further details