The economic effects of financial derivatives on corporate tax avoidance

Donohoe, Michael P.

doi:10.1016/j.jacceco.2014.11.001

Cited by 108 publications

(131 citation statements)

References 66 publications

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“…Consistent with Guay (1999) and Donohoe (2015b), a firm is a New User if it does not report a derivatives position when it first appears in the sample, but does report a position in a subsequent…”

Section: Data and Sample Selectionmentioning

confidence: 53%

Do analysts understand the economic and reporting complexities of derivatives?

Chang

Donohoe

Sougiannis

2016

Journal of Accounting and Economics

115

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We investigate whether and how the complexity of derivatives influences analysts' earnings forecast properties. Using a difference-in-differences design, we find that, relative to a matched control sample of non-users, analysts' earnings forecasts for new derivatives users are less accurate and more dispersed after derivatives initiation. These results do not appear to be driven by the economic complexity of derivatives, but rather the financial reporting of such economic complexity. Overall, despite their financial expertise, analysts routinely misjudge the earnings implications of firms' derivatives activity. However, we find evidence that a series of derivatives accounting standards has helped analysts improve their forecasts over time.

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Section: Data and Sample Selectionmentioning

confidence: 53%

Do analysts understand the economic and reporting complexities of derivatives?

Chang

Donohoe

Sougiannis

2016

Journal of Accounting and Economics

115

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“…21 These studies are Allayannis and Weston (2001), Campello et al (2011), Choi et al (2015, Donohoe (2015), Géczy et al (1997), Jin and Jorion (2006), Nance et al (1993), Pérez-González andYun (2013), Pincus and Rajgopal (2002), Tufano (1996), which can be seen as representatives of 20 In addition to a mixed effects multilevel model as displayed in Table 6, we also applied a simple ordinary least squares model as shown in Online Appendix F. Overall, both models show quite similar results. 21 For the selection of studies we used the VHB-JOURQUAL3 and incorporate studies, which are classified as A?.…”

Section: Discussionmentioning

confidence: 92%

What do we really know about corporate hedging? A meta-analytical study

Geyer‐Klingeberg

Hang

Rathgeber

et al. 2017

Bus Res

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This paper employs meta-analysis to aggregate and systematically analyze the mixed empirical evidence on the determinants of corporate hedging reported in 132 previously published studies covering data from more than 73,000 firms. Among the fourteen proxy variables analyzed by multivariate meta-analysis, three variables emerge as reliable explanatory factors for corporate hedging decisions supporting the bankruptcy and financial distress hypothesis: dividend yield (positive sign), liquidity (negative sign), and firm size (positive sign). Moreover, for tax-loss carry forwards (positive sign) and research and development (positive sign), our findings indicate a weak impact on corporate hedging behavior reflecting tax reasons, the coordination between financing and investment, and agency conflicts between shareholders and debtholders. Regarding the asymmetric information and agency conflicts of equity hypothesis, we find no explanatory power. The further analysis of heterogeneity via meta-regression reveals several factors that determine the mixed empirical evidence reported in previous studies. First, the results indicate that studies analyzing firms from North America report, on average, a lower impact of leverage on the corporate hedging decision. Moreover, studies examining more recent data samples tend to find a weaker relation between tangible assets and hedging, R&D and hedging, respectively. Overall, our results encourage scientific research to put more emphasis on finer-grained examinations of hedging variations and to discover rationales of corporate hedging extending classical financial theories.

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“…Existem também pesquisas contemporâneas que associam Agressividade Tributária a característi-cas, tais quais a responsabilidade social corporativa e sua reputação (Davis et al, 2016;Hoi, Wu & Zhang, 2013); marcas de consumo valioso (Watson, 2015); a conexões políticas (Brown, Drake & Wellman, 2015;Mills, Nutter & Schwab, 2013); uso de instrumentos financeiros derivados (Donohoe, 2015); fato de atuar em negócios diversificados (Zheng, 2017); e estar enfrentando dificuldades em planos de pensão (Chaudhry, Au Yong & Veld, 2017).…”

Section: Características Das Firmasunclassified

Agressividade Tributária: Um Survey da Literatura

Martinez

2017

REPeC

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Objetivo e Método: o objetivo deste artigo é revisar os estudos internacionais e no Brasil sobre a agressividade tributária, esta entendida como o comportamento de tentar evitar ou minimizar o ônus tributário explícito para a corporação. Enquanto tema de pesquisa acadêmica, o tax aggressiveness ou tax avoidance revela-se em um tópico diversificado e vasto, embora relativamente recente. Resultados e Contribuições: Entre as perguntas de pesquisa que nessa temática se desenvolvem, destaquem-se a identificação de quais seriam os determinantes da agressividade tributária da firma, apreciando: (i) características das firmas; (ii) atributos ambientais; (iii) restrições de gatekeepers; e (iv) incentivos para as firmas. Revisam-se os determinantes da agressividade tributária dos gestores e a influência da governança e estrutura de controle. Adicionalmente, identificam-se as potenciais consequências econômico-financeiras da agressividade tributária para as firmas e as proxies empíricas existentes para mensurar a agressividade tributária. O estudo se encerra com a apresentação de oportunidades futuras de pesquisa na temática.

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The economic effects of financial derivatives on corporate tax avoidance

Cited by 108 publications

References 66 publications

Do analysts understand the economic and reporting complexities of derivatives?

Do analysts understand the economic and reporting complexities of derivatives?

What do we really know about corporate hedging? A meta-analytical study

Agressividade Tributária: Um Survey da Literatura

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