Military Experience and Corporate Tax Avoidance

57 Pages Posted: 2 Aug 2013 Last revised: 28 Sep 2016

See all articles by Kelvin Law

Kelvin Law

Nanyang Technological University (NTU)

Lillian F. Mills

University of Texas at Austin - McCombs School of Business

Date Written: September 27, 2016

Abstract

We find that managers with military experience pursue less tax avoidance than other managers and pay an estimated $1–$2 million more in corporate taxes per firm-year. These managers also undertake less aggressive tax planning strategies with smaller tax reserves and fewer tax havens. Although they leave tax money on the table, boards hiring these managers benefit from reductions in other gray areas in corporate reporting. The broad implications are as follows: For employee selection, boards can consider employees’ personal characteristics as a control mechanism when outputs are difficult to contract ex ante or measure ex post.

Keywords: Tax Avoidance, Corporate Financial Reporting, Military Experience

JEL Classification: H25, H26, M41, G30

Suggested Citation

Law, Kelvin and Mills, Lillian F., Military Experience and Corporate Tax Avoidance (September 27, 2016). Review of Accounting Studies, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2302329 or http://dx.doi.org/10.2139/ssrn.2302329

Kelvin Law (Contact Author)

Nanyang Technological University (NTU) ( email )

Nanyang Business School
Singapore, 639798
Singapore

Lillian F. Mills

University of Texas at Austin - McCombs School of Business ( email )

Austin, TX 78712
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
670
Abstract Views
3,691
rank
41,971
PlumX Metrics