Corporate Governance and Tax Avoidance: Evidence from U.S. Cross-listing
50 Pages Posted: 25 Jun 2019 Last revised: 30 Mar 2022
Date Written: May 25, 2019
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
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