Corporate Governance and Tax Avoidance: Evidence from U.S. Cross-listing

Using a sample of firms from 51 countries and a difference-in-differences approach that exploits corporate governance shocks induced by cross-listing in the U.S., we find that firms tend to engage in less tax avoidance after cross-listing. This effect is more pronounced for firms that experience significant improvements in corporate governance, and for firms from countries with weaker shareholder protection and disclosure requirements. Taken together, the results indicate that cross-listing in the U.S. helps align the interests of managers and shareholders and reduces managerial diversion.

Keywords: cross-listing, tax avoidance, corporate governance, shareholder protection

JEL Classification: G21, G18, G32, G34, G35

Suggested Citation: Suggested Citation

Chen, Ruiyuan and El Ghoul, Sadok and Guedhami, Omrane and Wang, He and Yang, Yang, Corporate Governance and Tax Avoidance: Evidence from U.S. Cross-listing (May 25, 2019). Available at SSRN: https://ssrn.com/abstract=3409587 or http://dx.doi.org/10.2139/ssrn.3409587