We show that firms with higher stock liquidity engage less in extreme (i.e., either overly aggressive or overly conservative) tax avoidance. The effect of stock liquidity on tax avoidance is economically meaningful, is robust across alternative measures of tax avoidance and stock liquidity, and...

This study estimates the corporate tax savings from financial derivatives. I document a 3.6 and 4.4 percentage point reduction in three-year current and cash effective tax rates (ETRs), respectively, after a firm initiates a derivatives program. The decline in cash ETR equates to $10.69 million...

Tax avoidance is considered as old as taxation itself, and is traditionally viewed as being in the interest of shareholders since its aim is to reduce the firm’s cost structure. However, researchers have empirically found that corporate tax avoidance does not necessarily increase firm value as...

As a direct response to the recent trend in corporate expatriations, politicians have questioned the patriotism of firms that reorganize outside the U.S. and introduced numerous legislative proposals designed to prevent corporate expatriations. The implicit assumption made in proposing this...