Spillover Effects of Tax Avoidance on Peers' Firm Value

Bauckloh, Tobias; Hardeck, Inga; Inger, Kerry K.; Wittenstein, Patrick Uwe; Zwergel, Bernhard

doi:10.2308/tar-2018-0441

Cited by 21 publications

(3 citation statements)

References 74 publications

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“…To test the sensitivity of our baseline results using DiD in respect of the fundamental differences between the treatment and control groups, in line with previous studies (Basu et al., 2021; Bauckloh et al., 2021; Cazier et al., 2020), we use an entropy matching technique to match firms in the treatment group with those in the control group. The reasoning is that DiD can lead to potential endogeneity arising from unobserved and time‐varying differences between the treatment and control groups.…”

Section: Resultsmentioning

confidence: 99%

Does mixed ownership reform affect private firms’ ESG practices? Evidence from a quasi‐natural experiment in China

Cao

Xiao

2022

Financial Market

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This study investigates the impact of property rights reform on private firms' environmental, social, and governance (ESG) practices. ESG investing has become mainstream and a hot topic globally, but it is a black box of corporate ESG practices and performance. Importantly, it is not clear how to specifically enhance private firms' ESG practices.This study addresses this problem by exploring an ideal setting of China's mixed-ownership reform in which private firms acquire equity in state-owned enterprises (SOEs).We examine whether and how this reform affects private acquirer firms' ESG practices. Using a powerful differencein-differences design, we find that mixed-ownership reform significantly enhances private firms' ESG practices through heightened public scrutiny and the privileges of formal financing and government subsidies that are available due to the firms' partial government ownership after mixedownership reform. Our findings have policy implications for promoting ESG practices and SOE reform. Specifically, our empirical evidence indicates that mixed-ownership reform can facilitate sustainable development for both SOEs and private firms.

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Section: Resultsmentioning

confidence: 99%

Does mixed ownership reform affect private firms’ ESG practices? Evidence from a quasi‐natural experiment in China

Cao

Xiao

2022

Financial Market

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“…Relatedly, Armstrong et al (2019) document that tax planning strategies diffuse among industry peers. Bauckloh et al (2021) document negative spillover effects for industry peers of US multinational companies targeted by European Commission's state aid investigations. Furthermore, Kubick, Li, and Robinson (2020) find that board interlocks facilitate the appointment of tax experts on the board, which ultimately decreases effective tax rates.…”

Section: Thematic Discussion Of the Sna Literature In Accounting And ...mentioning

confidence: 99%

Social Networks Analysis in Accounting and Finance*

Bianchi

Causholli

Minutti‐Meza

et al. 2022

Contemporary Accting Res

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Social network analysis (SNA) examines whether interactions between individuals, teams, and organizations result in network structures and patterns that can explain important outcomes, including firm performance, management reporting behaviors, investor beliefs, and audit outcomes. This paper reviews the growing body of work on SNA in accounting and finance research, focusing on 162 articles published between 2000 and 2021, and offers a roadmap that may help move this literature forward. Our survey summarizes the elements of SNA, organizes this literature within a theoretical framework, and provides a thematic discussion of the context and contribution of the selected studies. We also discuss opportunities and challenges for future research. Finally, we include an empirical illustration of the key concepts and tools of SNA. We believe that SNA will continue to offer an interesting avenue for conducting high‐impact and cross‐disciplinary research in accounting and finance.

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“…Thus, they may change their tax behavior to mitigate these costs. For example, Bauckloh et al (2021) examine the European Commission's state aid investigations of private letter rulings, and they find that news about the potential loss of tax benefits among four large US multinational corporations is associated with an adverse stock price reaction among peer firms.…”

Section: Prior Research and Hypothesis Developmentmentioning

confidence: 99%

The effect of shareholder scrutiny on corporate tax behavior: Evidence from shareholder tax litigation

Donelson,

Glenn,

McGuire

et al. 2023

Contemporary Accting Res

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This study examines the effect of shareholder scrutiny of corporate tax avoidance behavior and its related financial reporting. Specifically, we explore the factors associated with shareholder tax litigation and its effect on the future tax behavior of the sued firm and its peers. We find that sued firms have lower cash and GAAP effective tax rates (ETRs) and engage in extreme tax avoidance before litigation. After litigation, they decrease tax avoidance activities, relative to matched control firms. Peer firms in the same industry as sued firms similarly reduce their level of tax avoidance and the likelihood of extreme tax avoidance after the litigation, relative to control firms. Additional analyses suggest that sued firms change their tax avoidance behavior, rather than merely their tax financial reporting. Finally, the spillover results are strongest for peer firms with the most tax avoidance (i.e., the lowest cash ETRs) when the sued firm's alleged misconduct is revealed.This article is protected by copyright. All rights reserved.

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Spillover Effects of Tax Avoidance on Peers' Firm Value

Cited by 21 publications

References 74 publications

Does mixed ownership reform affect private firms’ ESG practices? Evidence from a quasi‐natural experiment in China

Does mixed ownership reform affect private firms’ ESG practices? Evidence from a quasi‐natural experiment in China

Social Networks Analysis in Accounting and Finance*

The effect of shareholder scrutiny on corporate tax behavior: Evidence from shareholder tax litigation

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