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The impact of corporate tax avoidance on analyst coverage and forecasts
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He, Guanming, Ren, Helen Mengbing and Taffler, Richard J. (2020) The impact of corporate tax avoidance on analyst coverage and forecasts. Review of Quantitative Finance and Accounting, 54 . pp. 447-477. doi:10.1007/s11156-019-00795-7 ISSN 0924-865X.
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Official URL: http://dx.doi.org/10.1007/s11156-019-00795-7
Abstract
Corporate tax avoidance is likely to be associated with a high level of earnings management and with high financial opacity in the time-series. On this basis, we hypothesize that analyst coverage is negatively associated with corporate tax avoidance. Our results confirm this conjecture, and are robust to using a firm-fixed-effects model and a quasi-natural experiment to control for potential endogeneity. Additional analysis shows that analyst coverage is negatively related to tax risk, but there is no evidence that the informativeness of, or errors in, analyst forecasts are associated with tax avoidance. Overall, our study advances understanding of the implications of corporate tax avoidance for analyst behavior.
Item Type: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HD Industries. Land use. Labor | ||||||||
Divisions: | Faculty of Social Sciences > Warwick Business School > Finance Group Faculty of Social Sciences > Warwick Business School |
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Library of Congress Subject Headings (LCSH): | Corporations -- Taxation, Tax planning | ||||||||
Journal or Publication Title: | Review of Quantitative Finance and Accounting | ||||||||
Publisher: | Springer New York LLC | ||||||||
ISSN: | 0924-865X | ||||||||
Official Date: | February 2020 | ||||||||
Dates: |
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Volume: | 54 | ||||||||
Page Range: | pp. 447-477 | ||||||||
DOI: | 10.1007/s11156-019-00795-7 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Access rights to Published version: | Open Access (Creative Commons) | ||||||||
Date of first compliant deposit: | 13 March 2019 | ||||||||
Date of first compliant Open Access: | 13 March 2019 |
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