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

50 Pages Posted: 25 Jun 2019 Last revised: 30 Mar 2022

See all articles by Ruiyuan (Ryan) Chen

Ruiyuan (Ryan) Chen

West Virginia University

Sadok El Ghoul

University of Alberta - Campus Saint-Jean

Omrane Guedhami

University of South Carolina - Moore School of Business

He (Helen) Wang

West Virginia University - Department of Finance

Yang Yang

West Virginia University

Date Written: May 25, 2019

Abstract

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

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

Ruiyuan Chen

West Virginia University ( email )

1601 University Avenue
Morgantown, WV 26505
United States

Sadok El Ghoul (Contact Author)

University of Alberta - Campus Saint-Jean ( email )

Edmonton, Alberta T6G 2R3
Canada
780-465-8725 (Phone)
780-465-8760 (Fax)

Omrane Guedhami

University of South Carolina - Moore School of Business ( email )

Columbia, SC
United States

He Wang

West Virginia University - Department of Finance ( email )

Morgantown, WV 26506
United States

Yang Yang

West Virginia University ( email )

PO Box 6025
Morgantown, WV 26506
United States

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