Purpose – This paper aims to verify how the intellectual property (IP) box affects firms’ effective tax rate, growth and innovation activity outcomes related to intellectual property rights.
Design/methodology/approach – Implementing the innovation box regimes into the tax system intends to encourage firms to engage in more innovative activities. In UK, Italy and Poland, the IP box tax relief was introduced in 2013, 2015 and 2019, respectively. In return, companies may reduce their tax rate to increase their investment and innovativeness. With a panel model approach – system GMM and DiD with multiple time periods – it analyses data from the Orbis database for 2011–2019 of 673 firms from the gaming industry in 11 countries and hand-collected data on intellectual property rights protection. The authors study public and private companies from the gaming sector in leading European markets and all three countries that protect intellectual property rights of software (Japan, South Korea, the USA).
Findings – Recent reforms enable gaming companies to use preferential tax treatment for IP-related income and significantly impact a firm’s revenue growth.
Practical implications – Nevertheless, European gaming firms require time to leap the gap to the growth and innovativeness of countries that protect software.
Originality/value – The authors show that the IP box stimulates gaming firms to protect IP via wordmarks, figurative marks, trademarks and software patents that bring effects in five years. Despite the critics against IP box, the authors prove its lagged efficiency, especially in profitable and larger firms.

Purpose: One of the regulatory responses to the 2008 financial crisis was to internalize the costs related to banks’ distress by introducing bank levies. More than 23 European banking sectors have been confronted with the new levy regime imposing the additional tax on banks’ balance sheet.

Methodology: This study analyzes the effect of the levy introduction on banks’ profitability, credit activity, and on their business models. More importantly, we confront two different levy regimes – one imposed on banks’ assets and the other on liabilities – to assess their differential impact. A generalized least squares regression with a random effect is performed on a data sample of Hungarian and German credit institutions from 2005 to 2015.

Results: The results show that levy introduction weakened banking sectors in terms of their profitability as well as their lending activity. Even though banks try to compensate for the cost of the levies by passing some of the costs on to the customers and restructuring their operations to limit the tax burden, we find that these activities are not sufficient to offset the whole tax burden. We also note that while the asset levy has a more severe effect on banks’ profits, the liability levy severely affects banks’ lending due to lower interest margin resulting from higher cost of funding.

Findings: Our research results provide important conclusions for regulators, especially during turbulent periods such as the COVID-19 pandemic to strengthen the banking sectors by considering the levy suspension.

Purpose: The article evaluates the associative relationship between international supervisory board experts and foreign ownership, along with the experts’ influence on the financial and operating performance of firms. The study was based on data collected for 257 companies listed on the Warsaw Stock Exchange in 2010–2015.

Methodology: The dataset was built as a panel, and then generalized least squares regression models with a fixed or random effect were employed to test hypotheses.

Findings: The findings of the study clearly show that the presence of investigated firms in foreign markets positively affects company performance. Moreover, models with dependent variables ROA and ROS show that supervisory board members with foreign experience positively affect profitability indicators of firms that do not operate on foreign markets. The data analyses reveal that international experts are more effective advisors for companies that conduct no business activities on foreign markets. Furthermore, the results show a positive moderate association between the share of international experts in supervisory boards and the share of foreign ownership in the company.

Originality: The article contributes to the understanding of determinants and consequences of the presence of international experts in supervisory boards and company internationalization.

Purpose: Capital flows, tax competition, multinational companies and tax havens weakens governments’ ability to lead independent tax policy. This race to the bottom, especially in the case of CIT rate, seems to work. Aim of the text is to show that the governments are not as powerless as it is often claimed. Despite common opinion, nation-states retain a relatively significant autonomy in creating their own fiscal policies, including tax instruments. Size of funds kept in tax havens have not been growing for few years and international cooperation of tax authorities is more and more efficient in dealing with the tax fraud.

Methodology: The study uses desk research method for theoretical reasoning to verify the research
hypothesis. Moreover, the study seeks answering if the application of EU tax policies determines national tax policy. To that end, the authors utilize time series and cause-effect analysis, as well as quantitative research for the systematization of statistical information and regression analysis for the examination of statistical dependencies. Tax competition or the functioning of tax havens naturally limits the realization of the fundamental functions of fiscal policies, although the taxation remains one
of the most crucial instruments of macroeconomic and income policy of national authorities.

Findings: The most important data on public revenues structure in different OECD countries indicate
that taxation remains one of the most crucial instruments of macroeconomic and income policy of
national authorities. We also show that impact of FDI on hosting economy is not as positive as it is
said to be. There is no relation between FDI and R&D spending and level of wages in hosting country
is even affected in the negative way by the FDI inflow. Irrespective of the regulatory details introduced at the EU level – the basic factor affecting jets coordination in the field of cooperation between tax services brings effects both in terms of the current collection of tax liabilities
and the creation of regulations that hinder tax avoidance and under statement assessment.

Originality/value: The study focuses on an analysis of tax policy. The view that taxation of international corporations is fraught with difficulties finds support in the undeniable reality of tax competition.Moreover, a large and growing share of profits is transferred to low-tax places. The prospects for taxing international companies with positive rates seem unoptimistic. Therefore, it is essential to check how the national economy is affected by the FDI inflow in OECD countries.

Purpose: This study aims to investigate female top managers’ choice of working capital management
policies and its effect on firm profitability. The theoretical arguments about the effects of working
capital management policies on firm profitability and empirical evidence are often inconsistent.
Additionally, it is likely that the policy choice is closely related to the gender of top managers.

Methodology: Our research sample was all 136 manufacturing firms listed in Indonesian Stock
Exchange during the 2013–2017 period. Following the hypothesis formulation, this study employed
four estimation models tested using panel data regression.

Findings: Female CFOs tend to choose more conservative working capital investment policies.
Moreover, conservative investment policies have a positive effect on firm profitability and mediate
the impact of top female managers on firm profitability.

Originality: Previous literature tends to overlook the role of top female managers in affecting
working capital management policies and the effect of these policies on firm profitability. In this
respect, this study provides insights on the role of the gender of top managers as a factor that likely
explains the choice of working capital management policies in manufacturing firms which, in turn,
affect firm profitability.

Purpose: This paper examines the changing behavior of two calendar anomalies in African stock
returns – the month-of-the-year and the intra-month effects – and their implications for the adaptive
market hypothesis (AMH).
Methodology: We applied two-stage Markov switching models (MSMs) instead of the conventional
single state regression model. The sample period includes the daily index return of Nigerian, South
African, Mauritian, Moroccan, and Tunisian stock exchanges from January 1998 to February 2018.
Findings: We found that (i) all the markets except for the Johannesburg Stock Exchange (JSE) have
a higher tendency to be in bearish state than bullish state, (ii) month-of-the-year and intra-month
effects appear in one regime and disappear in another regime, and (iii) the behavior of calendar
anomalies is affected by market conditions and conforms to AMH rather than the efficient market
hypothesis (EMH).
Practical Implications: We present that (i) calendar anomaly is a characteristic that changes under
different regimes or market conditions in African stock markets, (ii) active investment management
may yield profits for market participants, depending on the market conditions and the anomaly in
question, and (iii) the right approach would be for investors to consider each market with its own
peculiarity even when they are in the same continent.
Originality/Value: The sensitivity of the month-of-the-year and the intra-month effects to market
conditions has not been documented in African stock markets, especially with the use of
regime-switching models

Purpose: The article analyzes the possible methods of public debt management, which not only aim to meet regulatory requirements but also obtain a market premium in the form of an optimal level of the yield on government bond yields that will be profitable for the issuer. The study analyzes the situation in the public finance sector in the countries that form the Visegrád Group (V4). The authors evaluate the main regulatory requirements of EU law in the area of numerical fiscal rules and their impact on the yield on basic securities such as ten-year government bonds, which directly influences the cost of servicing long-term public debt.

Methodology: The study uses desk research method for theoretical reasoning to verify the research hypothesis. The study seeks to answer the question of whether the application of national and EU fiscal rules in V4 budgetary frameworks contributes to lower yields on ten-year bonds and thereby reduces the cost of public debt. The authors utilize time series and cause-effect analysis as well as quantitative research for the systematization of statistical information and regression analysis for the examination of statistical dependencies.

Findings: The basic parameters subject to financial assessment within the fiscal rules index are (1) the deficit of public finance sector and (2) public debt with its servicing costs. In 2005–2016, the ratio of the public finance sector deficit to GDP was shaped in such a way that most V4 countries required the institution of excessive deficit procedures and further disciplinary regulations. The assessment of the situation in the public finance sector in the area of budget deficit and public debt does not translate into the yield on government bonds of non-Eurozone countries. Model-based testing indicates that the financial markets – when deciding to evaluate or purchase government bonds of non-Eurozone countries – failed to acknowledge the implementation of fiscal rules in these countries and its possible effects.

Originality: The study focuses on a unique comprehensive analysis of national fiscal rules employed in individual V4 countries and their impact on the yield on government bonds throughout the entire EU membership of the V4. What holds the greatest cognitive value in this article is the answer to the question of whether Eurozone membership impacts the valuation of a country’s public debt.

Purpose: This paper provides an empirical evaluation of R&D returns for a series of global companies who lead in innovation within the health care industry.

Methodology: The estimation procedure bases on two specifications: the parametric production function setting, and finite distributed lag model (FDL).

Findings: Using the most recent data on R&D investment by health care equipment and services along pharmaceuticals and biotechnology companies, we confirm the positive albeit mitigated impact of R&D efforts on performance indicators (levels of sales). Moreover, we comment on the current phenomena observed in health care industry and offer a policy view for ongoing and future challenges in the sector.

Added value: Since there is a dearth of recent empirical evidence on R&D returns in the broad health industry, this paper offers the evaluation of economic incentives for companies to invest in R&D. These incentives embrace the induced increase in sales and profits levels. The authors participate in a public debate concerning the optimal levels of R&D rewards required to sustain the innovation within the sector.

Purpose: The purpose of this paper is to examine the relationship between working capital management and firm performance for firms listed on the Indonesian Stock Exchange. Prior works have employed many indicators of the working capital. The results of previous studies, however, have been inconsistent. This study is an attempt to find out the best proxy of working capital in explaining firm’s performance.

Methodology: This study employs regression panels for five measures of working capital to model the data for fifty-four firm-year observations that meet the sampling criteria, covering the time 2010–2014. This study also uses adjusted R-squared as the criteria to select the strongest relationship between measures of working capital and firm performance.

Findings: The findings indicate that all proxies of working capital management met expected signs and statistical significance. Hence, working capital management significantly improves firms’ performance. The proxy of inventory turnovers is the best measure of working capital in explaining firm performance.

Originality: To the author’s knowledge, this is the first study examining the relationship between five measures of working capital management and firm performance in Indonesia or in any emerging markets; hence, this study contributes to the scarce literature on the management of working capital.

Purpose: Summarize the experience of using modern methods in the business plan with the application of economic and mathematical modeling.

Methodology: Theoretical and methodological basis of the study is the basic principles of economic theory, agricultural economics and scientific research of leading home and foreign scholars on the theory of planning.

Originality: This further justifies business planning processes in agriculture from the standpoint of raising economic protection of farmers. The methodology for assessing farm income for planned indicators through the application of fuzzy numbers method in business planning is improved.

Purpose: The paper aims at identifying the major information gaps related to the financial sector that have emerged during the last years, including the explanation of the reasons and consequences of these gaps.

Methodology: The analysis is conducted using the descriptive methodology based on real developments in the financial sector. This analysis identifies substantial institutional changes within the financial sector combined with the introduction of new financial instruments that significantly increased information gaps related to financial developments.

Findings: We found that one of the main reasons for the breakdown in the financial liquidity market was the sudden buildup of a systemic risk caused, among other things, by substantial information gaps and limitations in the transparency of financial markets. The low transparency of the financial markets has been caused by institutional changes and new financial instruments introduced within the financial sector. They were introduced by the financial institutions themselves to facilitate very risky financial activities that were very profitable for them in the short term, but – as it occurred – very disruptive for the whole financial system and the whole economy in the longer term.

Research limitations: The analysis is limited only to the consideration of the causes and consequences of statistical gaps substantially reducing the transparency of the financial sector. A more comprehensive project should also explore and provide an appropriate proposal for remedy data and – even more important – a proposal to setup a macroprudential policy framework.

Originality: The original contribution of the paper is the link between specific institutional changes within the financial sector as well as new financial instruments and the emergence of particular information gaps.

Purpose: The purpose of the article is to analyze some of the innovation drivers in Poland in comparison to the selected developed and developing countries, to present the general determinants and features of the “open innovation” concept, and finally to determine the most important incentives of the open knowledge ecosystem creation process in Poland.

Methodology: The research approach and methodology are based on the assumption that in the contemporary world economy innovativeness and competitiveness depend not only on traditional modes of technology transfer (e.g. foreign direct investment, license or arm’s length agreements), but also on knowledge absorption capabilities.

Findings: The transnational corporations have already perceived the knowledge creation potential of Internetbased digital communities, therefore they are strongly interested in the implementation of the “open innovation” concept in their business models. Based on completed survey results and a selected data comparative analysis one can conclude that the innovativeness of the Polish economy has not increased since the last two decades, and
future development prospects in this area are rather gloomy. It seems that the cornerstone of the open knowledge environment building process is a systemic change concerning citizen-state relations.

Originality: The value of the article stems from emphasizing the importance of trust and cooperation as the fundamental factors influencing growth of networked innovation capabilities of society. Moreover, without promoting the development of such social attitudes it is impossible to create a modern digital society, and to profit from ideas and knowledge circulating on the Web.