This paper reviews the major finance-related causes of private under-investment in innovation and the consequent alternative choices for public policy. The focus is on (i) incentive-based arguments that address the problem of limited appropriability of new knowledge, and (ii) the lacking access...

In the context of the statutory tax rate reductions enacted in the Tax Reform Act of 1986, this paper investigates the degree to which capital market participants anticipate and correctly interpret temporary income effects of tax-motivated income shifting. We find evidence consistent with...

This study examines whether managerial forecasts of annual effective tax rates, disclosed in interim financial statements, are useful in predicting future quarterly earnings, are incorporated in financial analysts' forecasts of quarterly earnings, or are impounded in stock prices. The integral...

As financial engineering becomes more sophisticated, taxing income from capital becomes increasingly difficult. We offer the first empirical study of a high profile strategy known as quot;tax-free hedging,quot; which offers economic benefits of a sale without triggering tax. We explore nontax...

As financial engineering becomes more sophisticated, taxing income from capital becomes increasingly difficult. A crucial issue for tax policy makers, then, is the case - or difficulty - of implementing tax-advantaged transactions. We offer the first empirical study of a high profile strategy...

Note: The following is a description of the paper and is not the actual abstract.Many studies have investigated share price behavior associated with firms' voluntary adoptions of the last-in, first-out inventory method, and a review of the literature provides a rich set of mixed and conflicting...

Massive dollars shuttled back and forth among firms on the twisted path to and passage of the 2017 tax reform. Prices of individual stocks responded to the difference between initial and revised expectations. From the bill's initiation in the House to final passage, high-tax firms gained...

This study investigates the effect of the debtor–creditor relationship on firms' tax planning decisions. We explore the initiation of credit default swaps (CDS) as a shock to the debtor–creditor relationship that attenuates the concavity of creditors' payoff function and reduces their...

Shareholders of publicly-traded subsidiaries are potentially susceptible to expropriation (tunneling) by parent companies (Atanasov, Boone, and Haushalter, 2010). Recent study suggests that this could be particularly true among U.S. master limited partnerships (“MLPs”), where there is often...

This paper investigates the extent to which analysts incorporate tax-based earnings information into their earnings forecasts relative to other earnings information. We find that analysts' mis-reaction to tax-based earnings information is distinct from their mis-reaction to other (non-tax)...