Assessing the Transaction Costs of Firms in the EU ETS: Lessons form Ireland

Until now, there has been little empirical evidence that EU Emissions Trading Scheme (ETS) transaction costs are incurred at firm level. The transaction costs (internal costs, capital costs, consultancy and trading costs) incurred by Irish firms under the EU ETS during its pilot phase (2005-2007) were measured and analysed. Evidence for the sources of transaction costs, their magnitude and the distribution of costs shows that these were mainly administrative in nature. Considerable variation in costs was found due to economies of scale, as the costs per tonne of CO2 were lower for participants with larger allocations. For the largest firms - accounting for over half the emissions - average transaction costs were €0.05 per tonne. However, for small firms, average transaction costs were €2.02 - over 18% of the current allowance price. This supports the concerns that transaction costs are excessive for smaller participants. The immediate policy implication is that additional attention will be needed to address different sizes of firms, number of installations per firm, and the size of the initial allocations.

Accruals accounting in the public sector: A road not always taken

The move from cash to accruals accounting by many governments is viewed as an aspect of an ongoing New Public Management agenda designed to achieve a more business-like and performance-focused public sector. Proponents argue that accruals accounting provides more appropriate information for decision makers and ultimately leads to a more efficient and effective public sector. The transition from cash to accruals accounting for UK central government departments was announced in the early 1990s and was embedded within approximately ten years. At that time there were clear indications that analogous changes, following a similar timeline, would occur in the Republic of Ireland (RoI). In reality, the changes were significantly less extensive. Utilising document analysis and interviews with key actors, this paper considers why a functioning accruals system was established in the UK whereas in the RoI the change to accruals accounting was a ‘road not taken’.

The Hand of Government in Shaping Accounting and Reporting in the UK Charity Sector

Accounting in the UK charity sector has changed massively over the last 25 years, with various stakeholders influencing what has occurred. Using insights from stakeholder theory, and interviews with a number of key actors, this article focuses on the influence of one definitive stakeholder – government – in developing a regime of quality accounting and reporting in the sector. In particular, the evolution of the Statement of Recommended Practice for charities is explored. It is argued that a much tighter and more meaningful regime of accounting and reporting has been encouraged by government, amongst other stakeholders, and this has led to a more accountable and healthier charitable sector.

Technological regimes, Schumpeterian patterns of innovation and firm-level productivity growth

The article investigates the relationships between technological regimes and firm-level productivity performance, and it explores how such a relationship differs in different Schumpeterian patterns of innovation. The analysis makes use of a rich dataset containing data on innovation and other economic characteristics of a large representative sample of Norwegian firms in manufacturing and service industries for the period 1998–2004. First, we decompose TFP growth into technical progress and efficiency changes by means of data envelopment analysis. We then estimate an empirical model that relates these two productivity components to the characteristics of technological regimes and a set of other firm-specific factors. The results indicate that: (i) TFP growth has mainly been achieved through technical progress, while technical efficiency has on average decreased; (ii) the characteristics of technological regimes are important determinants of firm-level productivity growth, but their impacts on technical progress are different from the effects on efficiency change; (iii) the estimated model works differently in the two Schumpeterian regimes. Technical progress has been more dynamic in Schumpeter Mark II industries, while efficiency change has been more important in Schumpeter Mark I markets.

Customs-Related Transaction Costs, Firm Size and International Trade Intensity

Customs are generally perceived as a time-consuming impediment to international trade. However, few studies have empirically examined the determinants and the impact of this type of government-imposed transaction costs. This paper analyses the role of firm size as a determinant of customs-related transaction costs, as well as the effect of firm size on the relationship between these costs and the international trade intensity of firms. The results of this study indicate that customs-related transaction costs repress international trade activities of firms, even at low levels of these costs. The paper identifies transaction-related economies of scale, simplified customs procedures and advanced information and communication technology as main determinants of customs-related transaction costs. It is shown that when these factors are taken into account, firm size has no effect on customs-related transaction costs. Policy implications are considered for firm strategy and public policy.