Firms have the incentive to enhance debt financing with higher corporate tax rates due to the increased value of interest deductions from the tax base. However, external debt is relatively costly for corporations with a high firm-specific risk. Moreover, for multinationals, the shifting of...

Firms are facing progressively more stringent tax disclosure requirements. In this paper, we examine whether increased qualitative tax transparency leads to intended outcomes using, as an exogenous shock, the 2016 UK reform that mandated the disclosure of a tax strategy for firms above a certain...

How did the rise of multinational enterprises (MNEs) put pressure on the prevailing international corporate tax framework? MNEs, and firms with market power, are not new phenomena, nor is the corporate income tax, which dates to the early 20th century. This prompts the question, what is...

We provide indirect empirical evidence of profit shifting behavior by multinational enterprises. This issue is analyzed in an econometric panel study for the years 1995 to 2005 and additionally in a cross-section for 2004 using a large micro database of European subsidiaries of multinationals...

This study examines whether internal information quality (IIQ) is associated with firms' external information quality (EIQ) and whether tax planning moderates this association. Based on the argument that higher internal information quality allows managers to convey higher quality information to...

This study examines whether internal information quality (IIQ) is associated with firms' external information quality (EIQ) and whether tax planning moderates this association. Based on the argument that higher internal information quality allows managers to convey higher quality information to...

Drawing on administrative panel data covering the full population of business owners in the UK, I study the effects of differential tax liabilities across organizational forms on business entry and on income shifting. I find that a 10% increase in savings from incorporation leads to a 1.7%...

If tax obligations are met, the balanced-budget substitution of an ad valorem tax on output for a specific tax not only raises a monopolist's production, but also represents a Pareto improvement. However, if tax avoidance or evasion is feasible and the marginal costs of such actions decline with...

We investigate whether corporate tax avoidance is affected by a firm's relationship with its customers. We find a positive association between a firm's tax avoidance and its customers' relationship-specific investments, demonstrating that customers value the cash flow benefits generated by a...

This paper analyzes corporate tax evasion in a principal-agent model with multitasking. A firm-owner hires a specialist tax manager who chooses the quantity as well as the quality of tax evasion. Higher quality is a form of self-insurance and lowers the firm's expected fine for tax evasion. In...