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- Title
Can Paying "Too Much" or "Too Little" Tax Contribute to Forced CEO Turnover?
- Authors
Chyz, James A.; Gaertner, Fabio B.
- Abstract
Our study examines the effect of corporate tax outcomes on forced CEO turnover. While prior research argues that firms often do not engage in tax avoidance due to reputational concerns, the empirical evidence suggesting the existence of reputational costs is scarce. In a broad sample of firms, we find evidence of a relation between the payment of low taxes and forced turnover. We also find that forced CEO turnover is more likely when the firm pays a high tax rate relative to its peers. Our results are consistent with the existence of previously unexplored individual reputational costs for not engaging in tax avoidance.
- Subjects
CORPORATE taxes; CHIEF executive officers; MANAGEMENT turnover; TAX evasion; CORPORATE image; TAX rates; DISMISSAL of executives; TAX shelters; ECONOMICS; EMPLOYMENT
- Publication
Accounting Review, 2018, Vol 93, Issue 1, p103
- ISSN
0001-4826
- Publication type
Article
- DOI
10.2308/accr-51767