Does Information Asymmetry Affect Corporate Tax Aggressiveness?
We investigate the effect of information asymmetry on corporate tax avoidance. Using a difference-in-differences matching estimator to assess the effects of changes in analyst coverage caused by broker closures and mergers, we find that firms avoid tax more aggressively after a reduction in analyst...
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| Format: | Journal Article |
| Language: | English |
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2018
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| Online Access: | https://hdl.handle.net/10356/87979 http://hdl.handle.net/10220/44541 |
| _version_ | 1826115093525430272 |
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| author | Chen, Jonas Tao Lin, Chen |
| author2 | Nanyang Business School |
| author_facet | Nanyang Business School Chen, Jonas Tao Lin, Chen |
| author_sort | Chen, Jonas Tao |
| collection | NTU |
| description | We investigate the effect of information asymmetry on corporate tax avoidance. Using a difference-in-differences matching estimator to assess the effects of changes in analyst coverage caused by broker closures and mergers, we find that firms avoid tax more aggressively after a reduction in analyst coverage. We further find that this effect is mainly driven by firms with higher existing tax-planning capacity (e.g., tax-haven presence), smaller initial analyst coverage, and a smaller number of peer firms. Moreover, the effect is more pronounced in industries where reputation matters more and in firms subject to less monitoring from tax authorities. |
| first_indexed | 2024-10-01T03:49:54Z |
| format | Journal Article |
| id | ntu-10356/87979 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T03:49:54Z |
| publishDate | 2018 |
| record_format | dspace |
| spelling | ntu-10356/879792023-05-19T06:44:40Z Does Information Asymmetry Affect Corporate Tax Aggressiveness? Chen, Jonas Tao Lin, Chen Nanyang Business School Information Asymmetry Tax We investigate the effect of information asymmetry on corporate tax avoidance. Using a difference-in-differences matching estimator to assess the effects of changes in analyst coverage caused by broker closures and mergers, we find that firms avoid tax more aggressively after a reduction in analyst coverage. We further find that this effect is mainly driven by firms with higher existing tax-planning capacity (e.g., tax-haven presence), smaller initial analyst coverage, and a smaller number of peer firms. Moreover, the effect is more pronounced in industries where reputation matters more and in firms subject to less monitoring from tax authorities. MOE (Min. of Education, S’pore) Published version 2018-03-09T08:47:07Z 2019-12-06T16:53:25Z 2018-03-09T08:47:07Z 2019-12-06T16:53:25Z 2017 Journal Article Chen, T., & Lin, C. (2017). Does Information Asymmetry Affect Corporate Tax Aggressiveness?. Journal of Financial and Quantitative Analysis, 52(5), 2053-2081. 0022-1090 https://hdl.handle.net/10356/87979 http://hdl.handle.net/10220/44541 10.1017/S0022109017000576 en Journal of Financial and Quantitative Analysis © 2017 Michael G. Foster School of Business, University of Washington. This paper was published in Journal of Financial and Quantitative Analysis and is made available as an electronic reprint (preprint) with permission of Michael G. Foster School of Business, University of Washington. The published version is available at: [http://dx.doi.org/10.1017/S0022109017000576]. One print or electronic copy may be made for personal use only. Systematic or multiple reproduction, distribution to multiple locations via electronic or other means, duplication of any material in this paper for a fee or for commercial purposes, or modification of the content of the paper is prohibited and is subject to penalties under law. 29 p. application/pdf |
| spellingShingle | Information Asymmetry Tax Chen, Jonas Tao Lin, Chen Does Information Asymmetry Affect Corporate Tax Aggressiveness? |
| title | Does Information Asymmetry Affect Corporate Tax Aggressiveness? |
| title_full | Does Information Asymmetry Affect Corporate Tax Aggressiveness? |
| title_fullStr | Does Information Asymmetry Affect Corporate Tax Aggressiveness? |
| title_full_unstemmed | Does Information Asymmetry Affect Corporate Tax Aggressiveness? |
| title_short | Does Information Asymmetry Affect Corporate Tax Aggressiveness? |
| title_sort | does information asymmetry affect corporate tax aggressiveness |
| topic | Information Asymmetry Tax |
| url | https://hdl.handle.net/10356/87979 http://hdl.handle.net/10220/44541 |
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