Autore
de Nichilo, Stefano

Titolo
How do earnings management practices distract International Environmental Funds? Empirical evidence of European Development Funds in Italy
Periodico
Geoprogress journal
Anno: 2020 - Volume: 7 - Fascicolo: 1 - Pagina iniziale: 87 - Pagina finale: 101

This study offers empirical evidence showing that Italian private firms manipulate their financial reporting process in order to benefit from capital subsidies. This attitude appears more emphasized for firms located in the Southern areas of Italy and intensifies as the amount of contribution increases. These findings are robust to alternative tests and support the arguments we elaborated to identify our hypotheses. Our first working hypothesis is that large companies discourage investment projects from smaller companies. Instead our second hypothesis is that companies in southern Italy have a higher pressure to distract Regional Development Funds than companies in northern Italy. In both hypotheses, the phenomenon of obscure accounting of European Development Fund is relevant. In recent years, both aspects of this phenomenon have been studied as a shadow in European Affairs not only by the European authorities but also by the Bank of Italy. They may be interpreted as the effects of several changes in the EU aid policy: the central role that assessing financial performance has assumed to select beneficiary firms, the EU radical trim of the total pie devoted to assisted areas coupled with a downsized role of the Italian central authorities to ensure regional cohesion has brought to light the tricky result that firms located in the poor South enjoy an even lower stake of resources as compared both to the North and the past.



SICI: 2384-9398(2020)7:1<87:HDEMPD>2.0.ZU;2-2
Testo completo: http://www.geoprogress.eu/wp-content/uploads/2021/02/GeoJ2020-5.De-Nichilo.pdf

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