Tax avoidance and firm value: does qualitative disclosure in the tax footnote matter?
This study examines whether qualitative disclosure in tax footnotes affects the market valuation of tax avoidance activities. We predict that more disclosures in tax footnotes mitigate investors’ concerns over the agency risk of managers engaging in potentially illegal tax avoidance and improve the...
Gespeichert in:
| Veröffentlicht in: | Review of accounting studies 2024-09, Vol.29 (3), p.2927-2970 |
|---|---|
| Hauptverfasser: | , , , |
| Format: | Artikel |
| Sprache: | eng |
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Tags: |
Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
|
| container_end_page | 2970 |
|---|---|
| container_issue | 3 |
| container_start_page | 2927 |
| container_title | Review of accounting studies |
| container_volume | 29 |
| creator | Luo, Le Ma, Mark Shuai Omer, Thomas C. Xie, Hong |
| description | This study examines whether qualitative disclosure in tax footnotes affects the market valuation of tax avoidance activities. We predict that more disclosures in tax footnotes mitigate investors’ concerns over the agency risk of managers engaging in potentially illegal tax avoidance and improve the transparency of firm performance, thus increasing firm valuation. Consistent with the prediction, we find that the market valuation of tax avoidance increases when firms’ tax footnotes disclose more qualitative information related to their tax avoidance activities. We provide several tests to show mechanisms underlying our main findings and mitigate concerns about alternative explanations. Overall, our study suggests that the tax-related disclosures in tax footnotes are useful for investors assessing the value of tax avoidance. |
| doi_str_mv | 10.1007/s11142-023-09773-w |
| format | Article |
| fullrecord | <record><control><sourceid>proquest_cross</sourceid><recordid>TN_cdi_proquest_journals_3089700323</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><sourcerecordid>3089700323</sourcerecordid><originalsourceid>FETCH-LOGICAL-c409t-3bc4a9779d28639aa11068e7469d7c756c77700b7453b43595a5d8f3ea0799073</originalsourceid><addsrcrecordid>eNp9kM1KAzEURoMoWKsv4CrgevRmMkkmbkSKfyC4adchzWQ0ZTppk0yrb290hO5c5UK-c-7lQ-iSwDUBEDeREFKVBZS0ACkELfZHaEJYHgSh_DjPtIaCc0ZP0VmMK4CMMTJBi7n-xHrnXaN7Y7HuG9y6sMY73Q32FjfeRrwddOeSTm5nceOi6XwcgsWux-nD4pQFrfep98nitU7JhrtzdNLqLtqLv3eKFo8P89lz8fr29DK7fy1MBTIVdGkqnc-VTVlzKrUmBHhtRcVlI4xg3AghAJaiYnRZUSaZZk3dUqtBSAmCTtHV6N0Evx1sTGrlh9DnlYpCLTNLS5pT5ZgywccYbKs2wa11-FIE1E99aqxP5frUb31qnyE8Qtb43sUDIglkr8ziKaJjJObP_t2Gw_Z_xN9wrXxz</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>3089700323</pqid></control><display><type>article</type><title>Tax avoidance and firm value: does qualitative disclosure in the tax footnote matter?</title><source>SpringerLink Journals</source><creator>Luo, Le ; Ma, Mark Shuai ; Omer, Thomas C. ; Xie, Hong</creator><creatorcontrib>Luo, Le ; Ma, Mark Shuai ; Omer, Thomas C. ; Xie, Hong</creatorcontrib><description>This study examines whether qualitative disclosure in tax footnotes affects the market valuation of tax avoidance activities. We predict that more disclosures in tax footnotes mitigate investors’ concerns over the agency risk of managers engaging in potentially illegal tax avoidance and improve the transparency of firm performance, thus increasing firm valuation. Consistent with the prediction, we find that the market valuation of tax avoidance increases when firms’ tax footnotes disclose more qualitative information related to their tax avoidance activities. We provide several tests to show mechanisms underlying our main findings and mitigate concerns about alternative explanations. Overall, our study suggests that the tax-related disclosures in tax footnotes are useful for investors assessing the value of tax avoidance.</description><identifier>ISSN: 1380-6653</identifier><identifier>EISSN: 1573-7136</identifier><identifier>DOI: 10.1007/s11142-023-09773-w</identifier><language>eng</language><publisher>New York: Springer US</publisher><subject>Accounting/Auditing ; Asymmetry ; Business and Management ; Business valuation ; Corporate Finance ; Disclosure ; Economic activity ; Fines & penalties ; Public Finance ; Stockholders ; Tax avoidance ; Tax havens ; Tax rates ; Transparency ; Valuation</subject><ispartof>Review of accounting studies, 2024-09, Vol.29 (3), p.2927-2970</ispartof><rights>The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2023. Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c409t-3bc4a9779d28639aa11068e7469d7c756c77700b7453b43595a5d8f3ea0799073</citedby><cites>FETCH-LOGICAL-c409t-3bc4a9779d28639aa11068e7469d7c756c77700b7453b43595a5d8f3ea0799073</cites><orcidid>0000-0003-2238-0596</orcidid></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktopdf>$$Uhttps://link.springer.com/content/pdf/10.1007/s11142-023-09773-w$$EPDF$$P50$$Gspringer$$H</linktopdf><linktohtml>$$Uhttps://link.springer.com/10.1007/s11142-023-09773-w$$EHTML$$P50$$Gspringer$$H</linktohtml><link.rule.ids>314,776,780,27901,27902,41464,42533,51294</link.rule.ids></links><search><creatorcontrib>Luo, Le</creatorcontrib><creatorcontrib>Ma, Mark Shuai</creatorcontrib><creatorcontrib>Omer, Thomas C.</creatorcontrib><creatorcontrib>Xie, Hong</creatorcontrib><title>Tax avoidance and firm value: does qualitative disclosure in the tax footnote matter?</title><title>Review of accounting studies</title><addtitle>Rev Account Stud</addtitle><description>This study examines whether qualitative disclosure in tax footnotes affects the market valuation of tax avoidance activities. We predict that more disclosures in tax footnotes mitigate investors’ concerns over the agency risk of managers engaging in potentially illegal tax avoidance and improve the transparency of firm performance, thus increasing firm valuation. Consistent with the prediction, we find that the market valuation of tax avoidance increases when firms’ tax footnotes disclose more qualitative information related to their tax avoidance activities. We provide several tests to show mechanisms underlying our main findings and mitigate concerns about alternative explanations. Overall, our study suggests that the tax-related disclosures in tax footnotes are useful for investors assessing the value of tax avoidance.</description><subject>Accounting/Auditing</subject><subject>Asymmetry</subject><subject>Business and Management</subject><subject>Business valuation</subject><subject>Corporate Finance</subject><subject>Disclosure</subject><subject>Economic activity</subject><subject>Fines & penalties</subject><subject>Public Finance</subject><subject>Stockholders</subject><subject>Tax avoidance</subject><subject>Tax havens</subject><subject>Tax rates</subject><subject>Transparency</subject><subject>Valuation</subject><issn>1380-6653</issn><issn>1573-7136</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2024</creationdate><recordtype>article</recordtype><recordid>eNp9kM1KAzEURoMoWKsv4CrgevRmMkkmbkSKfyC4adchzWQ0ZTppk0yrb290hO5c5UK-c-7lQ-iSwDUBEDeREFKVBZS0ACkELfZHaEJYHgSh_DjPtIaCc0ZP0VmMK4CMMTJBi7n-xHrnXaN7Y7HuG9y6sMY73Q32FjfeRrwddOeSTm5nceOi6XwcgsWux-nD4pQFrfep98nitU7JhrtzdNLqLtqLv3eKFo8P89lz8fr29DK7fy1MBTIVdGkqnc-VTVlzKrUmBHhtRcVlI4xg3AghAJaiYnRZUSaZZk3dUqtBSAmCTtHV6N0Evx1sTGrlh9DnlYpCLTNLS5pT5ZgywccYbKs2wa11-FIE1E99aqxP5frUb31qnyE8Qtb43sUDIglkr8ziKaJjJObP_t2Gw_Z_xN9wrXxz</recordid><startdate>20240901</startdate><enddate>20240901</enddate><creator>Luo, Le</creator><creator>Ma, Mark Shuai</creator><creator>Omer, Thomas C.</creator><creator>Xie, Hong</creator><general>Springer US</general><general>Springer Nature B.V</general><scope>OQ6</scope><scope>AAYXX</scope><scope>CITATION</scope><orcidid>https://orcid.org/0000-0003-2238-0596</orcidid></search><sort><creationdate>20240901</creationdate><title>Tax avoidance and firm value: does qualitative disclosure in the tax footnote matter?</title><author>Luo, Le ; Ma, Mark Shuai ; Omer, Thomas C. ; Xie, Hong</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c409t-3bc4a9779d28639aa11068e7469d7c756c77700b7453b43595a5d8f3ea0799073</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2024</creationdate><topic>Accounting/Auditing</topic><topic>Asymmetry</topic><topic>Business and Management</topic><topic>Business valuation</topic><topic>Corporate Finance</topic><topic>Disclosure</topic><topic>Economic activity</topic><topic>Fines & penalties</topic><topic>Public Finance</topic><topic>Stockholders</topic><topic>Tax avoidance</topic><topic>Tax havens</topic><topic>Tax rates</topic><topic>Transparency</topic><topic>Valuation</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Luo, Le</creatorcontrib><creatorcontrib>Ma, Mark Shuai</creatorcontrib><creatorcontrib>Omer, Thomas C.</creatorcontrib><creatorcontrib>Xie, Hong</creatorcontrib><collection>ECONIS</collection><collection>CrossRef</collection><jtitle>Review of accounting studies</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Luo, Le</au><au>Ma, Mark Shuai</au><au>Omer, Thomas C.</au><au>Xie, Hong</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Tax avoidance and firm value: does qualitative disclosure in the tax footnote matter?</atitle><jtitle>Review of accounting studies</jtitle><stitle>Rev Account Stud</stitle><date>2024-09-01</date><risdate>2024</risdate><volume>29</volume><issue>3</issue><spage>2927</spage><epage>2970</epage><pages>2927-2970</pages><issn>1380-6653</issn><eissn>1573-7136</eissn><abstract>This study examines whether qualitative disclosure in tax footnotes affects the market valuation of tax avoidance activities. We predict that more disclosures in tax footnotes mitigate investors’ concerns over the agency risk of managers engaging in potentially illegal tax avoidance and improve the transparency of firm performance, thus increasing firm valuation. Consistent with the prediction, we find that the market valuation of tax avoidance increases when firms’ tax footnotes disclose more qualitative information related to their tax avoidance activities. We provide several tests to show mechanisms underlying our main findings and mitigate concerns about alternative explanations. Overall, our study suggests that the tax-related disclosures in tax footnotes are useful for investors assessing the value of tax avoidance.</abstract><cop>New York</cop><pub>Springer US</pub><doi>10.1007/s11142-023-09773-w</doi><tpages>44</tpages><orcidid>https://orcid.org/0000-0003-2238-0596</orcidid></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 1380-6653 |
| ispartof | Review of accounting studies, 2024-09, Vol.29 (3), p.2927-2970 |
| issn | 1380-6653 1573-7136 |
| language | eng |
| recordid | cdi_proquest_journals_3089700323 |
| source | SpringerLink Journals |
| subjects | Accounting/Auditing Asymmetry Business and Management Business valuation Corporate Finance Disclosure Economic activity Fines & penalties Public Finance Stockholders Tax avoidance Tax havens Tax rates Transparency Valuation |
| title | Tax avoidance and firm value: does qualitative disclosure in the tax footnote matter? |
| url | https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2025-02-05T07%3A24%3A40IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest_cross&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Tax%20avoidance%20and%20firm%20value:%20does%20qualitative%20disclosure%20in%20the%20tax%20footnote%20matter?&rft.jtitle=Review%20of%20accounting%20studies&rft.au=Luo,%20Le&rft.date=2024-09-01&rft.volume=29&rft.issue=3&rft.spage=2927&rft.epage=2970&rft.pages=2927-2970&rft.issn=1380-6653&rft.eissn=1573-7136&rft_id=info:doi/10.1007/s11142-023-09773-w&rft_dat=%3Cproquest_cross%3E3089700323%3C/proquest_cross%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=3089700323&rft_id=info:pmid/&rfr_iscdi=true |