Browsing by Author "Columbano, Claudio"

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    Disclosure, use and interpretation of the financial information of governments: three essays
    (IE University, 2021-03-11) Columbano, Claudio; Trombetta, Marco; https://ror.org/02jjdwm75
    This dissertation offers three studies aimed at shedding new light on the disclosure, use and interpretation of the financial information released by governments. The first two chapters are based on a hand-collected data set covering the forecasts disclosed by European Union governments over the period 2001-2018. The third chapter is based on 27 interviews with sovereign rating personnel working at four credit rating agencies and on archival material. Thechapters contribute novel perspectives on the peculiar financing reporting problem that confronts governments. In particular, the first chapter shows that the transparency of governmental financial disclosures responds to a cost-benefit trade-off similar to that which characterizes corporations. Accordingly, governments’ disclosure choices are self-interested, but they are not always driven by opportunistic motives. The second chapter reveals that equity investorsare active users of government forecasts, although they interpret them heterogeneously. In particular, the credibility of government’s commitment appears to explain the emergence of differential interpretations among investors when governments issue optimistic forecasts. The third chapter documents that credit rating analysts, too, differ in their interpretation of the financial information released by governments and use their subjective judgment to make up for the short comings of automated valuation models. Collectively, the dissertation extends extant accounting research by providing new perspectives on theunderstudied financial reporting problem that characterizes governments.
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    Measuring fiscal guidance transparency
    (Institute of Public Finance, 2022) Columbano, Claudio; https://ror.org/02jjdwm75
    The public disclosure of medium-term fiscal plans – “fiscal guidance” – represents an increasingly important,yet understudied element of fiscal transparency frameworks. This article introduces a dataset that contains a large set of forecasts on fiscal and economic items issued by all European Union governments over the period 2001-2018. These forecasts are used to build an index of fiscal guidance transparency and to explore its main characteristics and correlates. The analysis reveals that governments are more transparent in their guidance on fiscal flows and macroeconomic aggregates than on liabilities,assets,and exogenous assumptions. In addition,transparency declines in the forecast horizon and in the strength of the governing coalition. Collectively,the results suggest that fiscal guidance transparency may be a sensitive area of policymaking that deserves scholarly attention. Possible uses of the measure of fiscal guidance transparency in research are discussed © 2022. This is an Open Access article distributed under a Creative Commons Attribution-NonCommercial 4.0 International License which permits non commercial use and redistribution,as long as you give appropriate credit,provide a link to the license,and indicate if changes were made
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    When do governments "go dark"? Evidence on governments' disclosure choices in periods of uncertainty
    (Taylor & Francis, 2022-10-20) Columbano, Claudio; Trombetta, Marco; Agencia Estatal de Investigación; https://ror.org/02jjdwm75
    We examine the effect of uncertainty shocks on the level of fiscal guidance – the guidance issued by governments on the expected evolution of the fiscal and economic outlook. Because uncertainty makes governments’ expectations less precise but potentially more valuable to users, we hypothesize that a disclosure dilemma leads governments to balance a higher demand for guidance with a higher probability of issuing inaccurate forecasts. Using natural disasters to randomize uncertainty shocks in our sample, we find that on average, governments issue less guidance in periods of uncertainty. The effect is driven by a reduction in the number of forecasts on the future evolution of balance sheet items, but only when governments have low refinancing needs and face a relatively quiet bond market. Instead, governments that maintain a stable level of guidance in periods of uncertainty appear to cater to coercive isomorphic pressures stemming from creditors. We further document that the relative ‘transparency’ of governments in periods of uncertainty is negatively related to indicators of fiscal reporting quality. Collectively, the evidence indicates that in the public sector, uncertainty leads to a trade-off between disclosure quantity and quality.