Stock price reactions to news about corporate tax avoidance and evasion

Blaufus, Kay; Möhlmann, Axel; Schwäbe, Alexander N.

doi:10.1016/j.joep.2019.04.007

Cited by 65 publications

(43 citation statements)

References 58 publications

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“…Another recent methodological approach was a between-subjects experiment performed by Antonetti and Anesa (2017) to investigate how stakeholders react to corporate tax strategies that are either aggressive or conservative. Only a few authors chose an event-study methodology to examine the stock price reaction to news referring to corporate tax avoidance (Blaufus et al, 2019;Hanlon & Slemrod, 2009). Most authors performed a regression analysis where corporate tax avoidance was the analysed as (dependent) variable (Armstrong et al, 2012;Chen et al, 2010;Chyz et al, 2013;Lanis & Richardson, 2012;Mafrolla & D'Amico, 2016;Richardson et al, 2013;2015b;Steijvers & Niskanen, 2014).…”

Section: Literature Reviewmentioning

confidence: 99%

Determinants of tax avoidance – evidence on profit tax-paying companies in Romania

Mocanu

Constantin

Răileanu

2021

Economic Research-Ekonomska Istraživanja

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Our objective is to investigate the determinants of tax avoidance in Romanian companies in 2013-2017. Our initial sample comprises 236 privately owned companies that are payers of profit tax and have been found guilty of tax evasion. This was matched with 236 'compliant' companies structured similarly by industry, whereas the final sample comprises 1674-year-observations. We defined 'compliant' those companies that have never been prosecuted for tax evasion. Our main finding is that larger companies with lower financial performance and lower leverage ratio are more inclined towards tax avoidance. The geographical region and the industry sector in which companies operate in are also determining their tax avoidant-behaviour. Surprisingly, the fiscal regulations amended starting with 2016 did not lead to an apparent exacerbation of tax avoidance among profit tax payers.

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Section: Literature Reviewmentioning

confidence: 99%

Determinants of tax avoidance – evidence on profit tax-paying companies in Romania

Mocanu

Constantin

Răileanu

2021

Economic Research-Ekonomska Istraživanja

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“…In both papers, samples are limited to US stocks. In the existing literature, there are few articles focused solely on German market, but they only include governance-related issues, such as frauds (Knauer et al, 2015), and tax evasion (Blaufus et al, 2019).…”

Section: Theoretical Framework and Hypothesesmentioning

confidence: 99%

Disclosures of ESG Misconducts and Market Valuations: Evidence from DAX Companies

Dziadkowiec

Daszyńska-Żygadło

2021

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Environmental, social and governance (ESG) factors have become an important topic on capital markets amid an increasing interest in responsible investing. Despite this fact, public companies have been involved in a number of ESG misconducts in recent years, which were often against the interests of their stakeholders. In our research, we refer to stakeholder theory in order to show how disclosures of social misconducts against the companies’ stakeholders have affected market valuation of listed companies, which we treat as one of the measures of shareholders’ wealth. We conduct an event study on 235 ESG misconducts related to DAX companies. The data sample of ESG news was hand collected in a thorough content analysis in the period of 2000-2019. The main findings reveal that investors’ reactions were more severe for ESG news released after 2009 than before this date as illustrated by negative and significant cumulative average abnormal returns (CAARs) in different event windows, while before 2009 CAARs were insignificant. We also found out that investors reacted stronger to governance- rather than social or environmental news. Our results provide a guidance for listed companies on how ESG mismanagements might affect their market value, and for investors who intend to incorporate ESG factors in their investment decision processes.

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“…Delimitation problems arise from ambiguities in tax law, such as discretion regarding the acceptable range of arm' s-length transfer prices (Gravelle, 2009(Gravelle, , 2015. Due to the resulting uncertainty, tax avoidance and tax planning can be subject to the risk that certain tax position cannot be sustained in a potential tax dispute (Blaufus et al, 2019).…”

Section: Background Definitions and Scopementioning

confidence: 99%

On the Determinants and Effects of Corporate Tax Transparency: Review of an Emerging Literature

Müller¹,

Spengel²,

Vay³

2020

SSRN Journal

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In response to discussions about large multinational enterprises' tax planning activities, legislators around the world have adopted numerous regulations to increase corporate tax transparency. New settings and datasets have spurred empirical research in recent years. Our paper presents a review of this emerging literature on corporate tax transparency. To this end, we first propose a framework to structure the diverse landscape of tax-related disclosures. Second, we elaborate on the conceptual underpinnings of tax transparency by drawing on established theories from financial accounting and CSR reporting research. Third, we survey empirical evidence on corporate tax transparency. We classify the findings into (i) determinants of firms' tax disclosure decisions, (ii) informativeness of different kinds of tax-related disclosure, and (iii) effects of increased tax transparency on firms and their stakeholders. Finally, we synthesize the main inferences and offer suggestions for future research.

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Stock price reactions to news about corporate tax avoidance and evasion

Cited by 65 publications

References 58 publications

Determinants of tax avoidance – evidence on profit tax-paying companies in Romania

Determinants of tax avoidance – evidence on profit tax-paying companies in Romania

Disclosures of ESG Misconducts and Market Valuations: Evidence from DAX Companies

On the Determinants and Effects of Corporate Tax Transparency: Review of an Emerging Literature

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