Download or read book Executive Inside Debt and Corporate Tax Avoidance written by Anna Alexander and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Does Inside Debt Moderate Corporate Tax Avoidance written by T.R. Kubick and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Theory suggests that inside debt held by executives in the form of deferred compensation and unfunded pensions serves to align management incentives with creditors, thereby incentivizing them to act more conservatively. Evidence in the literature suggests that creditors favour less aggressive tax avoidance strategies. Accordingly, the authors investigate whether the level of inside debt is associated with less corporate tax avoidance. Consistent with theoretical predictions and the high level of financial sophistication of the chief financial officer (CFO), they find that the level of inside debt for the CFO, but not chief executive officer (CEO), is associated with less tax avoidance. In addition, they find that the proximity to financial distress magnifies the inverse relation between CFO inside debt and tax avoidance. Their results are robust to numerous supplemental tests, including instrumental variables estimation and matching.

Download or read book Tax Avoidance and Capital Structure written by Alessandro Gabrielli and published by Springer Nature. This book was released on 2023-05-23 with total page 103 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a comprehensive overview of the implications of tax avoidance for a firm’s capital structure, highlighting the key role played by free cash flow and agency conflicts. First, the book provides an outline of the theories and empirical evidence concerning the role of taxes in the Theory of Capital Structure. It reviews the studies investigating the relationship between agency conflicts and capital structure. The book explores the role of free cash flow and agency conflicts in the relationship between tax avoidance and capital structure. In the final section, the results of an empirical investigation conducted on a sample of U.S. public firms are also presented. The empirical research examines whether and how tax avoidance is associated with debt covenant violation across the stages of the corporate life cycle. Specifically, the research uses the concept of the corporate life cycle stage to analyse whether and how the association between tax avoidance and debt covenant violation varies in different agency settings. Consistent with the hypotheses drawn on the Agency Theory, the findings of the empirical research suggest life cycle stages moderate the association between tax avoidance and debt covenant violation. Overall, this book sheds light on the potential implications of tax avoidance activities for a firm’s capital structure. The book will be of interest to both experienced and early-stage scholars interested in the topic. Moreover, the book will also be of interest to policymakers, investors, analysts, lenders, and other market participants.

Download or read book International Corporate Tax Avoidance A Review of the Channels Magnitudes and Blind Spots written by Sebastian Beer and published by International Monetary Fund. This book was released on 2018-07-23 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reviews the rapidly growing empirical literature on international tax avoidance by multinational corporations. It surveys evidence on main channels of corporate tax avoidance including transfer mispricing, international debt shifting, treaty shopping, tax deferral and corporate inversions. Moreover, it performs a meta analysis of the extensive literature that estimates the overall size of profit shifting. We find that the literature suggests that, on average, a 1 percentage-point lower corporate tax rate will expand before-tax income by 1 percent—an effect that is larger than reported as the consensus estimate in previous surveys and tends to be increasing over time. The literature on tax avoidance still has several unresolved puzzles and blind spots that require further research.

Download or read book Tax Avoidance Activities of U S Multinational Corporations written by Sonja Lynne Olhoft and published by . This book was released on 1999 with total page 224 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Effects of Executives on Corporate Tax Avoidance written by Scott Dyreng and published by . This book was released on 2012 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates whether individual top executives have incremental effects on their firms' tax avoidance that cannot be explained by characteristics of the firm. To identify executive effects on firms' effective tax rates, we construct a dataset that tracks the movement of 908 executives across firms over time. The results indicate that individual executives play a significant role in determining the level of tax avoidance that firms undertake. The economic magnitude of the executive effects on tax avoidance is large. Moving between the top and bottom quartiles of executives results in approximately an eleven percent swing in GAAP effective tax rates; thus, executive effects appear to be an important determinant in firms' tax avoidance.

Download or read book Corporate Tax Avoidance Debt Ratio and Corporate Governance written by Hiroshi Onuma and published by . This book was released on 2018 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether tax avoidance is associated with corporate debt policy. Specifically, this study investigates the influence of bond investors and financial institutions such as the banks, which are long-term loan owners, on corporate governance (CG) to determine comprehensively the relationship between tax avoidance and debt ratio. Note that, the financial institutions in Japan have a larger role in indirect finance policies, relative to in the European and U.S. financial markets, and that the financial institutions of the other Asian nations seem to take on the same level of responsibility as those of Japan.This study firstly investigates the association between debt ratio and corporate tax avoidance. Secondly, we examine the influence of effectiveness of debt governance on debt ratio and CG. Thirdly, we focus on the representative tools, such as outside directors and auditors for CG and corporate tax avoidance. Finally, we test the influence of the main banks on this effect because, in addition to their monitoring role, main banks also play a significant advisory role and are thus likely to be in a better position to make superior decisions about a firm's optimal debt and capital structure mix.According to the main result of this study, it seems that the debt enhancement effect is more dominant than the debt substitution effect in Japanese firms. When tax avoidance increases, firms' profitability rise. Thus, considering the ability to afford a loan from a financial institution, the firms can borrow more. With regard to interactive effects among CG, debt policy, and tax avoidance, we find the CG of firms strengthens when they carry out tax avoidance. If the outside director ratio increases, then the monitoring function of the debtholders improves due to the enhancement of CG functions, and our result suggests that the financial institutions in Japan achieve an effective monitoring function.

Download or read book New Developments in Corporate Finance and Tax Avoidance written by John B. Shoven and published by . This book was released on 1986 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: The financial behavior of corporations has changed greatly in the last ten years. Previously most of the cash that stockholders received from corporations took the form of dividends, and economists' models that have dividends as the ultimate determinant of equity values were not far off the mark. This paper documents how much things have changed. There are strong tax incentives for nondividend cash payments between corporations and shareholders. These payments can take the form of a repurchase by the company of its own shares, or the acquisition of the shares in another company. There has been tremendous growth in the magnitude of nondividend cash payments. In the early 1970s these payments amounted to roughly 15 percent of dividends. By 1984, they exceeded dividends, and in 1985 the amounted to $120 billion, or almost 50 percent more than total dividends in the economy. The paper shows that dividends per unit equity have not fallen. Rather, the acquisition of equity has allowed firms to retain relatively constant debt equity ratios in the past five years despite strong equity markets. Firms have chosen to absorb equity and issue debt, roughly holding leverage constant, and have thus saved large amounts of taxes. The paper estimates that the cost to the Treasury of treating share purchase payments differently than dividends was more than $25 billion in 1985. It also finds that future corporate tax collections are significantly reduced by the resulting decline in corporate equity. The paper suggests that the existing model of dividend driven equity valuation must be discarded. It simply is not consistent with the facts. Further research on the form of payments between firms and their shareholders is clearly merited

Download or read book Taxes and Business Strategy written by Myron S. Scholes and published by . This book was released on 2015-01-03 with total page 528 pages. Available in PDF, EPUB and Kindle. Book excerpt: For MBA students and graduates embarking on careers in investment banking, corporate finance, strategy consulting, money management, or venture capital Through integration with traditional MBA topics, Taxes and Business Strategy, Fifth Edition provides a framework for understanding how taxes affect decision-making, asset prices, equilibrium returns, and the financial and operational structure of firms. Teaching and Learning Experience This program presents a better teaching and learning experience-for you and your students: *Use a text from an active author team: All 5 authors actively teach the tax and business strategy course and provide students with relevant examples from both classroom and real-world consulting experience. *Teach students the practical uses for business strategy: Students learn important concepts that can be applied to their own lives. *Reinforce learning by using in-depth analysis: Analysis and explanatory material help students understand, think about, and retain information.

Download or read book Pay Without Performance written by Lucian A. Bebchuk and published by Harvard University Press. This book was released on 2004 with total page 308 pages. Available in PDF, EPUB and Kindle. Book excerpt: The company is under-performing, its share price is trailing, and the CEO gets...a multi-million-dollar raise. This story is familiar, for good reason: as this book clearly demonstrates, structural flaws in corporate governance have produced widespread distortions in executive pay. Pay without Performance presents a disconcerting portrait of managers' influence over their own pay--and of a governance system that must fundamentally change if firms are to be managed in the interest of shareholders. Lucian Bebchuk and Jesse Fried demonstrate that corporate boards have persistently failed to negotiate at arm's length with the executives they are meant to oversee. They give a richly detailed account of how pay practices--from option plans to retirement benefits--have decoupled compensation from performance and have camouflaged both the amount and performance-insensitivity of pay. Executives' unwonted influence over their compensation has hurt shareholders by increasing pay levels and, even more importantly, by leading to practices that dilute and distort managers' incentives. This book identifies basic problems with our current reliance on boards as guardians of shareholder interests. And the solution, the authors argue, is not merely to make these boards more independent of executives as recent reforms attempt to do. Rather, boards should also be made more dependent on shareholders by eliminating the arrangements that entrench directors and insulate them from their shareholders. A powerful critique of executive compensation and corporate governance, Pay without Performance points the way to restoring corporate integrity and improving corporate performance.

Download or read book Tax and Corporate Governance written by Wolfgang Schön and published by Springer Science & Business Media. This book was released on 2008-03-12 with total page 423 pages. Available in PDF, EPUB and Kindle. Book excerpt: Academic research shows that well-known principal-agent and capital market problems are strongly influenced by tax considerations. Against this background, this volume is the first to present a fully-fledged overview of the interdependence of tax and corporate governance. Not only the basic political, legal and economic questions but also major topics like income measurement, shareholding structures, corporate social responsibility and tax shelter disclosure are covered.

Download or read book Curbing Corporate Debt Bias written by Ruud A. de Mooij and published by International Monetary Fund. This book was released on 2017-02-10 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt: Tax provisions favoring corporate debt over equity finance (“debt bias”) are widely recognized as a risk to financial stability. This paper explores whether and how thin-capitalization rules, which restrict interest deductibility beyond a certain amount, affect corporate debt ratios and mitigate financial stability risk. We find that rules targeted at related party borrowing (the majority of today’s rules) have no significant impact on debt bias—which relates to third-party borrowing. Also, these rules have no effect on broader indicators of firm financial distress. Rules applying to all debt, in contrast, turn out to be effective: the presence of such a rule reduces the debt-asset ratio in an average company by 5 percentage points; and they reduce the probability for a firm to be in financial distress by 5 percent. Debt ratios are found to be more responsive to thin capitalization rules in industries characterized by a high share of tangible assets.

Download or read book The Role of Managerial Ability in Corporate Tax Avoidance written by Allison Koester and published by . This book was released on 2016 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: Most prior studies model tax avoidance as a function of firm-level characteristics and do not consider how individual executive characteristics affect tax avoidance. This paper investigates whether executives with superior ability to efficiently manage corporate resources engage in greater tax avoidance. Our results show that moving from the lower to upper quartile of managerial ability is associated with a 3.15 (2.50) percent reduction in a firm's one-year (five-year) cash effective tax rate (ETR). We examine how higher ability managers reduce income tax payments and find they engage in greater state tax planning activities, shift more income to foreign tax havens, make more R&D credit claims, and make greater investments in assets that generate accelerated depreciation deductions. Identifying a manager characteristic related to firms' tax policy decisions adds to our understanding of the factors that explain the substantial variation in corporate income tax payments across firms.

Download or read book Taxing Corporate Income in the 21st Century written by Alan J. Auerbach and published by Cambridge University Press. This book was released on 2007-04-16 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book was first published in 2007. Most countries levy taxes on corporations, but the impact - and therefore the wisdom - of such taxes is highly controversial among economists. Does the burden of these taxes fall on wealthy shareowners, or is it passed along to those who work for, or buy the products of, corporations? Can a country with high corporate taxes remain competitive in the global economy? This book features research by leading economists and accountants that sheds light on these and related questions, including how taxes affect corporate dividend policy, stock market value, avoidance, and evasion. The studies promise to inform both future tax policy and regulatory policy, especially in light of the Sarbanes-Oxley Act and other actions by the Securities and Exchange Commission that are having profound effects on the market for tax planning and auditing in the wake of the well-publicized accounting scandals in Enron and WorldCom.

Download or read book Debt Bias and Other Distortions written by International Monetary Fund. Fiscal Affairs Dept. and published by International Monetary Fund. This book was released on 2009-12-06 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: Tax distortions are likely to have encouraged excessive leveraging and other financial market problems evident in the crisis. These effects have been little explored, but are potentially macro-relevant. Taxation can result, for example, in a net subsidy to borrowing of hundreds of basis points, raising debt-equity ratios and vulnerabilities from capital inflows. This paper reviews key channels by which tax distortions can significantly affect financial markets, drawing implications for tax design once the crisis has passed.

Download or read book Technological Change and Technology Strategy written by Robert E. Evenson and published by . This book was released on 1994 with total page 144 pages. Available in PDF, EPUB and Kindle. Book excerpt: Theoretical contributions; Technological infrastructure; Technological assets and development; International flows of technology; Technological investment in the private sector; Returns to technological activities; Policy issues.

Download or read book Empirical Capital Structure written by Christopher Parsons and published by Now Publishers Inc. This book was released on 2009 with total page 107 pages. Available in PDF, EPUB and Kindle. Book excerpt: Empirical Capital Structure reviews the empirical capital structure literature from both the cross-sectional determinants of capital structure as well as time-series changes.