Credit Rating Conservatism and Corporate Tax Avoidance: Evidence from the Dodd-Frank Act As a Quasi-Natural Experiment

The Unintended Consequence of Land Finance: Evidence from Corporate Tax Avoidance

“…The determinants of corporate tax avoidance behavior have been studied extensively in recent years. This stream of research has uncovered a broad spectrum of parties and factors that may affect a firm's tax behavior, such as shareholders (Chen et al 2010, Cheng et al 2012, debt holders (Hasan et al 2014), executives (Armstrong et al 2012, Koester et al 2016, financial analysts (Chen and Lin 2017), labor unions (Chyz et al 2013), customers and suppliers (Cen et al 2017, Naritomi 2019), auditors (McGuire et al 2012, credit rating agencies (Chen et al 2021a), the public (Mills et al 2013), import competition (e.g., Chen et al 2021b), and the political environment (Baloria and Klassen 2017). Yet relatively little is known about the role of local governments in corporate taxation, despite the fact that the state is de facto the largest minority shareholder in firms because of its tax claim on cash flows (Desai et al 2007).…”