Essays on tax systems and corporate tax avoidance: the effect on MNC location choices and firm value

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Title: Essays on tax systems and corporate tax avoidance: the effect on MNC location choices and firm value
Author/Artist: Baker, Michael A.
Date: 2016-12-31
Abstract/Description: The following dissertation is structured as two related essays on tax systems and corporate tax avoidance.

The first essay focuses on the firm level impact of a government’s transition from a worldwide tax system to a territorial tax system. Utilizing a case study approach, ten firms within the tax jurisdiction of the United Kingdom are analyzed pre- and post-transition. Firm behavior is evaluated pre- and post-transition through firm level incentives to shift earnings and firm level utilization of tax havens (i.e. subsidiaries located in tax advantageous areas). Despite significant efforts put forth by governments to reduce corporate tax avoidance and tax haven utilization, case study findings reveal little evidence that territorial tax systems promote such firm behavior.

The second essay focuses on the firm level change in share value, and the associated return to holding such shares, for firms that engage in corporate inversion. Cumulative abnormal returns are reviewed for a set of inverting firms to determine whether shareholders value corporate inversion transactions. In addition, this essay reviews the relationship between such cumulative abnormal returns and certain firm level incentives to shift earnings, tax haven utilization, and other firm characteristics such as permanently reinvested foreign earnings. Results reveal that the level of both permanently reinvested earnings and intangible assets impact the value shareholders place on the shares of firms engaged in corporate inversions. (Author abstract)
Subject: accounting
finance
corporate inversions
event study
inversions
tax avoidance
tax havens
tax systems
Citation Link: http://hdl.handle.net/10474/3135
APA Citation: Baker, M.A. (2016). Essays on tax systems and corporate tax avoidance: the effect on MNC location choices and firm value. Retrieved from http://academicarchive.snhu.edu
Advisor: Aybar, Bulent
Committee Member: Nugent, Nicholas
Ficici, Aysun
Dhakar, Tej

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