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Some academic publishers accused of using tax avoidance strategies to boost profits while stifling competition

Date:
November 1, 2012
Source:
University of Leicester
Summary:
Some of the biggest academic publishers are accused in a new study by researchers in the UK of using tax avoidance strategies to boost profits while they engage in football transfer style practices to stifle competition.

Some of the biggest academic publishers are accused in a new study by researchers in the UK of using tax avoidance strategies to boost profits while they engage in football transfer style practices to stifle competition.

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In a paper on the findings, the authors from the University of Leicester School of Management claim that publication of academic papers -- based largely on state-funded research -- can be so lucrative that publishing houses are able to enjoy net profit margins as high as 53 per cent. That compares with 6.9 per cent for electricity utilities, 5.2 per cent for food suppliers, and 2.5 per cent for newspapers.

The returns are further enhanced when publishers operating in the UK move their offices to tax havens overseas -- a practice that raises ethical questions in times of austerity, the paper argues. Its authors are calling for the publishers of academic journals to be included in the review of tax havens ordered by Danny Alexander, the Chief Secretary to the Treasury. He has instructed civil servants to find a way to stop offshore companies receiving public subsidies or contracts.

The study follows the report by an independent working group led by Dame Janet Finch that found that giving industry free access to research could have considerable economic benefits. The review, commissioned by David Willetts, the Universities and Science Minister, urged the funders of research to encourage scientists to publish in free access journals instead of those that hide behind high subscription costs and Internet pay walls.

The Leicester School of Management paper, "What are we to do with feral publishers?," argues that if publishers refuse to lower their subscription prices, academics should boycott their journals and start up alternative and more affordable ones to increase access to scholarly work. The practice has been encouraged in the United States by Harvard University that recently told its faculty members to make their research freely available through open access journals and to resign from publications that keep articles behind pay walls. Harvard was responding to price hikes imposed by many academic publishers.

The Leicester paper, to be published in the journal Organization, urges publishers to make significant reductions in their annual subscription prices, or face the prospect of academics establishing more competitively priced journals.

One of the paper's authors, Leicester School of Management head Professor Simon Lilley, admits however that such a move would mean starting a new publication from scratch, as existing titles are governed by rules that make transferring ownership very difficult.

"Journals are like Premiership footballers in terms of transferability, negotiations can only begin if a current publisher clearly communicates a desire to sell," he said.

Nevertheless, strength of feeling against so-called "greedy publishers" is now so strong that "a mass boycott of journals is an increasingly realistic possibility," he added.

Professor Lilley wrote the paper with co-authors Dr David Harvie, a senior lecturer in finance and political economy, Dr Geoff Lightfoot a senior lecturer in entrepreneurship and accounting, and Kenneth Weir, an accountancy lecturer.


Story Source:

The above story is based on materials provided by University of Leicester. Note: Materials may be edited for content and length.


Journal Reference:

  1. D. Harvie, G. Lightfoot, S. Lilley, K. Weir. What are we to do with feral publishers? Organization, 2012; DOI: 10.1177/1350508412448859

Cite This Page:

University of Leicester. "Some academic publishers accused of using tax avoidance strategies to boost profits while stifling competition." ScienceDaily. ScienceDaily, 1 November 2012. <www.sciencedaily.com/releases/2012/10/121031213958.htm>.
University of Leicester. (2012, November 1). Some academic publishers accused of using tax avoidance strategies to boost profits while stifling competition. ScienceDaily. Retrieved April 18, 2015 from www.sciencedaily.com/releases/2012/10/121031213958.htm
University of Leicester. "Some academic publishers accused of using tax avoidance strategies to boost profits while stifling competition." ScienceDaily. www.sciencedaily.com/releases/2012/10/121031213958.htm (accessed April 18, 2015).

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