Katharina Nicolay & Johannes Voget
EU citizens should be able to assess whether banks are paying their “fair share of taxes” in the countries they operate in. This call is especially important given the central role of banks and the large number of public subsidies they have received during the financial crisis. This purpose was the line of thought of European Parliamentarians when they, in 2013, quite spontaneously, pushed for a mandatory increase in tax transparency, leading to the political decision to adopt a public country-by-country reporting obligation for EU financial institutions. A team of researchers from the University of Mannheim, including Katharina Nicolay and Johannes Voget, investigated the capital market reaction to this decision. How did investors react to the increase in tax transparency induced by the new legislation?
Organizational design is an important determinant of firm transparency. In a recent study published in Management Science, Anja Schöttner, together with Matthias Kräkel, investigated what happens when a firm delegates more pricing authority to its sales persons. The fundamental problem is that, from the companies’ point of view, the pricing behavior between their sales agents and customers can lack transparency. Kräkel and Schöttner analyze how this problem affects the optimal contract design and delegation of decision rights to the sales agent.
Katharina Hombach & Thorsten Sellhorn
Nudging is said to be an alternative way to achieve compliance, contrasting more heavy-handed methods such as command-and control legislation. Katharina Hombach and Thorsten Sellhorn showed that nudging and transparency can go hand in hand. They examined ‘targeted transparency‘ regulation, which is aimed at nudging firms towards changing their business activities in socially desirable ways. In their review paper, they developed a framework that lays out the necessary conditions under which targeted transparency regulation can be effective, and reviewed the emerging empirical evidence.
Laurence van Lent
Most people think that corporate disclosures are all about numbers and hard facts. While numbers play a central role, recent developments in machine learning and computational linguistics show that much more can be learned about important issues faced by companies, which is “hidden” between the numbers. Laurence van Lent’s research attempts to uncover this hidden information. Together with a team of international researchers he recently developed and published a measure for a firm’s exposure to political risk by using information gleaned from discussions between management and financial analysts in earnings conference calls.
Caren Sureth-Sloane & Joachim Gassen
Transparency is not only our research topic but also the guiding principle of our work. Thus, we will make our work transparent by sharing our research outcomes (data, code and more) with the academic community. In addition, members of the TRR 266 will blog about their work, findings in relation to current topics, developments and events they might come across. We will kick off the blog series with the initiators and spokespersons of the TRR 266, and strong advocates of open science and science communication: Caren Sureth-Sloane and Joachim Gassen.