Home -> Law Blog Directory -> Corporate Governance Blogs -> The Harvard Law School Corporate Governance Blog

OR PHONE (866) 635-1838 for Bankruptcy Help, (866) 635-6190 for Divorce,
(866) 635-2689 for Personal Injury or (866) 635-9402 for Criminal Defense

Find a Local Lawyer

Bankruptcy (866) 635-1838
Divorce (866) 635-6190
Personal Injury (866) 635-2689
Criminal Defense (866) 635-9402

Corporate Governance

: The Harvard Law School Corporate Governance Blog

Corporate Tax Avoidance and Stock Price Crash Risk

By Harvard Law School Program on Corporate Governance

ADVERTISEMENTS

Editor?s Note: The following post comes to us from Kim Jeong-Bon, Professor of Accountancy at City University of Hong Kong; Yinghua Li of the Accounting Department at Purdue University; and Liandong Zhang of the Department of Accountancy at City University of Hong Kong.

In the paper, Corporate Tax Avoidance and Stock Price Crash Risk: Firm-Level Analysis, which is forthcoming in the Journal of Financial Economics, we examine the association between the extent of a firm?s tax avoidance and its future stock price crash risk. Recently, Desai, Dyck, and Zingales (2007) and Desai and Dharmapala (2006) put forth a ?theft and taxes? idea: Complex tax avoidance arrangements can provide management with the tools, masks, and justifications for rent-diverting activities, such as earnings manipulation, unauthorized compensation, and insider trading. The purpose of our paper is to test this ?theft and taxes? idea in the context of stock price crash risk.

Click here to read the complete post...

Full post as published by The Harvard Law School Corporate Governance Blog on August 30, 2010 (boomark / email).