 Long-term tax strategy and corporate acquisition payment structure: An analysis based on the book-tax tradeoff theoryK. Hung Chan, Miao He, Phyllis Lai Lan Mo and Weiyin Zhang Journal of Contemporary Accounting and Economics, 2024, vol. 20, issue 3 Abstract: This study examines the relationship between corporate acquirers’ long-term tax strategy (i.e., past behavior) and their subsequent choice of an acquisition payment method (i.e., future behavior) based on a book-tax tradeoff analysis. We find that acquirers with a high (low) level of long-term tax avoidance are more likely to have cash (stock)-financed acquisitions. Political influence attenuates the significance of the above relationship. Among the acquirers who use cash-financed payment method, those who are less tax aggressive tend to include debt to finance their acquisitions, suggesting that debt and non-debt tax shields are substitutes for each other in acquisitions. Keywords: Book-tax tradeoff theory; Corporate acquisition payment structure; Long-term tax avoidance; Political influence (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jocaae:v:20:y:2024:i:3:s1815566924000420 DOI: 10.1016/j.jcae.2024.100442 Access Statistics for this article Journal of Contemporary Accounting and Economics is currently edited by Agnes C.S. Cheng, P. Clarkson, F.A. Gul, Zoltan Matolcsy, Dan Simunic and Ben Srinidhi More articles in Journal of Contemporary Accounting and Economics from Elsevier |
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