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Full-Text Articles in Business
From Boom To Doom To Boom: Offshore Financial Centres And Development In Small States, Richard Woodward
From Boom To Doom To Boom: Offshore Financial Centres And Development In Small States, Richard Woodward
Articles
During the 1990s tax havens and offshore financial centres (OFCs) were subject to a string of initiatives designed to raise their tax and regulatory regimes to accepted international standards. Many commentators forecast that this would lead to the demise of OFCs, a worry for the many small states whose economic well being depended heavily on the provision of offshore financial services. Despite this regulatory onslaught many small state OFCs have prospered in the new millennium. This paper seeks to explain this apparent paradox by arguing that (1) international initiatives were riddled with loopholes and exceptions that have been gleefully seized …
Corporate Tax Avoidance And Stock Price Crash Risk: Firm-Level Analysis, Jeong-Bon Kim, Yinghua Li, Liandong Zhang
Corporate Tax Avoidance And Stock Price Crash Risk: Firm-Level Analysis, Jeong-Bon Kim, Yinghua Li, Liandong Zhang
Research Collection School Of Accountancy
Using a large sample of U.S. firms for the period 1995-2008, we provide strong and robust evidence that corporate tax avoidance is positively associated with firm-specific stock price crash risk. This finding is consistent with the following view: Tax avoidance facilitates managerial rent extraction and bad news hoarding activities for extended periods by providing tools, masks, and justifications for these opportunistic behaviors. The hoarding and accumulation of bad news for extended periods lead to stock price crashes when the accumulated hidden bad news crosses a tipping point, and thus comes out all at once. Moreover, we show that the positive …