Expected Economic Growth and Corporate Tax Planning

Kim, Jae-Woo; McGuire, Sean T.; Savoy, Steven; Wilson, Ryan J.

doi:10.2139/ssrn.3132077

Cited by 4 publications

(2 citation statements)

References 46 publications

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“…In contrast, Kim et al (2011) show that the higher the downside risk, the more the corporate aggressive tax avoidance, in the sense that corporate tax planning is associated with economic expectations. Kim et al (2018) further argue that the lower the expectations about the economy in the future, the lower the expectations about future pretax cash flows. Furthermore, firms are financially constrained due to restrained lending when facing economic uncertainty (Bordo et al, 2016).…”

Section: Introductionmentioning

confidence: 96%

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Corporate tax effects of economic policy uncertainty

Kang

Jing

2020

Accounting & Finance

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We show consistent results that corporate cash tax burden within a year rises when economic policy uncertainty heightens using aggregate-level data. Timevarying tax effects of policy uncertainty are gradual and take time to induce corporate precautionary motives to engage in cash tax saving in the long run. Firm-level analysis confirms that the tax effects of policy uncertainty are asymmetric and depend on underlying sources of monetary/fiscal policy uncertainty. The contemporaneous effect of monetary policy uncertainty on the cash effective tax rate is positive, whereas fiscal policy uncertainty shows a oneyear delayed negative effect on the cash effective tax rate.

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Section: Introductionmentioning

confidence: 96%

“…Kim et al . (2018) further argue that the lower the expectations about the economy in the future, the lower the expectations about future pretax cash flows. Furthermore, firms are financially constrained due to restrained lending when facing economic uncertainty (Bordo et al ., 2016).…”

Section: Introductionmentioning

confidence: 99%