corporate tax rates and tax loss offset rules on firm risk-taking. Testing the theoretical predictions, we find that firm risk …-taking is positively related to the length of tax loss periods. This result occurs because the loss rules shift a portion of …-specific expectations of future tax loss recovery. …

This article addresses the question whether net operating loss (NOL) observations can be implemented in the measurement … operating losses from their sample, they should be aware of misleading tax expense before and after loss-years that remain in … tax expenses of firms around loss years but that the loss structure in the data partly conceals the true development of U …