On the other hand, 2016/17 has seen a decrease in new deals being initiated, which is likely to be reflected in more modest figures in 2017/18. The collapse in the price of oil and other commodities has hit investments in those sectors hard, and this has been exacerbated by currency depreciation in a number of African countries. As a result of the increased currency and execution risk, PE funds and other financial investors are expecting greater risk premiums. Although depreciated currencies may represent excellent value for new investments, that is little comfort to investors who have seen a decline in the value of previous investments.
Four specifications are estimated based on how the tax rate variable is entered. In the first specification in the two appendix tables, the tax rate variable is the 1-year lagged value of the change in the net-of-tax rate. In the second and third specifications the 5-year and 10-year lagged value is entered, respectively. Lastly, the 10-year distributed lag of the tax rate variable is entered. In the distributed lag model, an additional hypothesis test is performed. An F-test on whether or not all the tax rate variables in the distributed lag are jointly significant is performed.