Work

Do Creditors Influence Corporate Tax Planning? Evidence from Loan Covenants

Year: 2020

Type: book-chapter

Abstract: This study examines how creditor interventions after debt covenant violations affect corporate tax avoidance. Using a regression discontinuity design, we find that creditor interventions increase borrowers' tax avoidance. This effect is concentrated among firms with weaker shareholder governance before creditor interventions and among those with less bargaining power during subsequent debt renegotiations. Our results indicate that creditors play an active role in shaping corporate tax policy outside of bankruptcy.

Source: Emerald Group Publishing Limited eBooks

DOI: 10.1108/s1058-749720200000027001

Authors: Kirsten Cook, Tao Ma, Yijia (Eddie) Zhao

Language: English

Topic: Corporate Taxation and Avoidance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: green

OpenAlex ID: W3124042878

FWCI: 15.67

Cites: 85

Cited by: 13

Related to: 10