Is Tax Avoidance Related to Firm Risk? Academic Article

abstract

• ABSTRACTWe test whether tax avoidance strategies are associated with greater firm risk. We find that low tax rates tend to be more persistent than high tax rates and that measures of tax avoidance commonly used in the literature are generally not associated with either future tax rate volatility or future overall firm risk. Our evidence suggests that, on average, corporate tax avoidance is accomplished using strategies that are persistent and do not increase firm risk. We also find that the volatility of cash tax rates is associated with future stock volatility, suggesting that tax rate volatility and overall firm risk are related.JEL Classifications: M41.

authors

• Williams, Brian

published proceedings

• The Accounting Review

altmetric score

• 6.25

author list (cited authors)

• Guenther, D. A., Matsunaga, S. R., & Williams, B. M.

citation count

• 295

complete list of authors

• Guenther, David A||Matsunaga, Steven R||Williams, Brian M

publication date

• January 2017

publisher

• American Accounting Association  Publisher

published in

• Accounting Review  Journal

keywords

• 35 Commerce, Management, Tourism And Services
• 3501 Accounting, Auditing And Accountability
• 3502 Banking, Finance And Investment
• Prevention

Digital Object Identifier (DOI)

• 10.2308/accr-51408

start page

• 115

end page

• 136

volume

• 92

issue

• 1

URL

• http://dx.doi.org/10.2308/accr-51408