Do stock prices affect corporate tax behavior?
Journal of Financial Reporting and Accounting
ISSN: 1985-2517
Article publication date: 8 November 2024
Abstract
Purpose
This study aims to examine how firm-specific information in stock prices influences corporate tax behavior.
Design/methodology/approach
This study uses ordinary least squares (OLS) regressions to examine the association between stock price informativeness and effective tax rate (ETR) volatility.
Findings
Stock price informativeness is positively associated with short-term tax avoidance as measured by ETR volatility.
Originality/value
While prior research examines the association between market activity and the level of ETRs, this study examines other various aspects of tax behavior.
Keywords
Acknowledgements
The author is thankful for the guidance of their dissertation committee: Inder Khurana (chair), Stevie Neuman, Matthew Glendening and Adam Yore. The author would like to thank Mary Cowx, Hoyoun Kyung, Ken Shaw, Steve Lin, Zabi Rezaee, Joseph Zhang, Joanna Golden, Hannah Smith and workshop participants at the University of Missouri and the University of Memphis for their valuable comments.
Citation
Kunz, P.W. (2024), "Do stock prices affect corporate tax behavior?", Journal of Financial Reporting and Accounting, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JFRA-12-2023-0758
Publisher
:Emerald Publishing Limited
Copyright © 2024, Emerald Publishing Limited