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- Title
Corporate Tax Havens and Transparency.
- Authors
Bennedsen, Morten; Zeume, Stefan
- Abstract
We investigate shareholders' reactions to the increased transparency of corporate tax haven activities in a hand-collected subsidiary data set covering 17,331 publicly listed firms in 52 countries. An increase in transparency through the staggered signing of bilateral tax information exchange agreements (TIEAs) between home countries and tax havens is associated with a 2.5% increase in the value of affected firms. The results are stronger for firms with more complex tax haven structures and weakly governed firms. Furthermore, firms that respond to TIEAs by haven hopping (i.e., they move subsidiaries from affected to nonaffected tax havens) do not experience an increase in firm value. These results are consistent with tax havens being used for expropriation activities that extend beyond pure tax-saving activities.
- Subjects
TAX havens; ORGANIZATIONAL transparency; CORPORATE tax planning; STOCKHOLDER attitudes; VALUATION of corporations; TAX evasion; SHELL corporations; TAX rates; ECONOMICS; INTERNATIONAL cooperation
- Publication
Review of Financial Studies, 2018, Vol 31, Issue 4, p1221
- ISSN
0893-9454
- Publication type
Article
- DOI
10.1093/rfs/hhx122