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of ownership layers in offshore investment structures and in revenues reported by tax
haven-based subsidiaries. Furthermore, after the implementation of the act, tax avoidance
activities through tax havens decreased, as evidenced by a considerable increase in
corporate effective cash tax rates. These findings support the notion that in an environment
where tax incentives in tax havens are diminishing, companies should relocate core
income-generating activities to locations where firms’ economic value is created.
The fourth article titled “The Impact of Economic Policy Uncertainty on Non-
GAAP Earnings’ Quality” by Lo, Chen, Chen, and Liu examines whether economic
policy uncertainty (EPU) would incrementally promote voluntary disclosures of non-
GAAP earnings by firms with the SPI recognition. The impact of EPU on the exclusion
quality is also examined. Using a sample of US listed firms ranging from 2003 to 2017,
they find that under higher EPU, the incremental relationship between the SPI recognition
and the likelihood of voluntary disclosure of non-GAAP earnings is positive. Second, the
relationship between EPU and the exclusion quality is positive for firms with voluntary
disclosures of non-GAAP earnings. Third, firms exclude more SPIs under higher EPU.
Furthermore, the monitoring role of analysts makes the positive effect of EPU on exclusion
quality stronger. Moreover, the incremental relationship between the voluntary non-
GAAP earning disclosure and information asymmetry is negative under higher EPU. They
suggest these findings sustain the informative motive for non-GAAP earnings disclosure.

Hsiou-Wei Lin
San-Lin Chung
Chih-Ping Wei