Corporate Political Connections and Tax Aggressiveness
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review
Author(s)
Related Research Unit(s)
Detail(s)
Original language | English |
---|---|
Pages (from-to) | 78-114 |
Journal / Publication | Contemporary Accounting Research |
Volume | 33 |
Issue number | 1 |
Online published | 1 Jul 2015 |
Publication status | Published - 2016 |
Link(s)
Abstract
This study investigates the relation between corporate political connections and tax aggressiveness. We study a broad array of corporate political activities, including the employment of connected directors, campaign contributions, and lobbying. Using a large hand-collected data set of U.S. firms' political connections, we find that politically connected firms are more tax aggressive than nonconnected firms, after controlling for other determinants of tax aggressiveness, industry and year fixed effects, and the endogenous choice of being politically connected. Our findings are robust to various measures of political connections and tax aggressiveness. These results are consistent with the conjecture that politically connected firms are more tax aggressive because of their lower expected cost of tax enforcement, better information regarding tax law and enforcement changes, lower capital market pressure for transparency, and greater risk-taking tendencies induced by political connections.
Bibliographic Note
Full text of this publication does not contain sufficient affiliation information. The Research Unit(s) information for this record is based on the then academic department affiliation of the author(s).
Citation Format(s)
Corporate Political Connections and Tax Aggressiveness. / KIM, CHANSOG (FRANCIS); ZHANG, LIANDONG.
In: Contemporary Accounting Research, Vol. 33, No. 1, 2016, p. 78-114.
In: Contemporary Accounting Research, Vol. 33, No. 1, 2016, p. 78-114.
Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review