Corporate Political Connections and Tax Aggressiveness
Chansog (Francis) Kim
City University of Hong Kong - College of Business
City University of Hong Kong
September 22, 2013
This study investigates the relation between corporate political connections and tax aggressiveness. We study a broad array of corporate political activities, including the employment of connected directors, campaign contributions, and lobbying. Using a large hand-collected dataset of U.S. firms’ political connections, we find that politically connected firms are more tax aggressive than non-connected firms, after controlling for other determinants of tax aggressiveness, industry and year fixed effects, and the endogenous choice of being politically connected. Our findings are robust to various measures of political connections and tax aggressiveness. The relation between political connections and tax aggressiveness is stronger for firms with lower institutional ownership.
Number of Pages in PDF File: 67
Keywords: Political connections, tax aggressiveness, tax shelter, campaign contributions, lobbying
JEL Classification: H26, D72, G34working papers series
Date posted: August 1, 2013 ; Last revised: September 22, 2013
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
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