Banking Deregulation and Corporate Tax Avoidance

China Journal of Accounting Research, Forthcoming

36 Pages Posted: 28 Sep 2016 Last revised: 9 Oct 2016

See all articles by Bill Francis

Bill Francis

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology

Ning Ren

Long Island University Post; Rensselaer Polytechnic Institute

Qiang Wu

Rensselaer Polytechnic Institute (RPI) - Lally School of Management

Date Written: September 27, 2016

Abstract

We investigate whether tax avoidance substitutes for external financing. We exploit interstate banking deregulation as a quasi-external shock to examine whether firms engage in less tax avoidance after banking deregulation, because of cheaper and easier access to credit from banks. We find no empirical evidence to support this substitutive relation, even for firms with higher financial constraints or firms with higher external financing dependence.

Keywords: Tax avoidance, interstate banking deregulation, external financing

Suggested Citation

Francis, Bill and Ren, Ning and Wu, Qiang, Banking Deregulation and Corporate Tax Avoidance (September 27, 2016). China Journal of Accounting Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2844215 or http://dx.doi.org/10.2139/ssrn.2844215

Bill Francis

Rensselaer Polytechnic Institute (RPI) - Lally School of Management & Technology ( email )

110 8th St
Troy, NY 12180
United States

Ning Ren

Long Island University Post ( email )

720 Northern Boulevard
Brookville, 11548-1327
United States
5162992095 (Phone)

Rensselaer Polytechnic Institute ( email )

United States
5852819777 (Phone)

Qiang Wu (Contact Author)

Rensselaer Polytechnic Institute (RPI) - Lally School of Management ( email )

110 8th St
Troy, NY 12180
United States
518-276-3338 (Phone)
518-276-8661 (Fax)

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