This paper examines the effect of short selling on corporate tax avoidance. We propose a financial constraint view, that short selling triggers corporate insiders' incentive to avoid taxes for funding investment opportunities in emerging markets. Employing staggered short-sale deregulation on...

We examine whether labor market frictions affect firms' tax aggressiveness. Exploiting the adoption of U.S. state-level Wrongful Discharge Laws as a quasi-exogenous shock to a firm's firing costs, we document a decline in tax aggressiveness for firms located in states that increase employment...