The role of tax policy within corporate governance: evidence from inversions

Amanda R. Marino () and D. G. DeBoskey ()
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Amanda R. Marino: Fowler College of Business, San Diego State University
D. G. DeBoskey: Fowler College of Business, San Diego State University

International Journal of Disclosure and Governance, 2024, vol. 21, issue 2, No 7, 268-276

Abstract: Abstract This study develops a recent database of corporate inversions, and we descriptively explore three different corporate inversion timeframes from 1982 to 2022. We examine how the external governance mechanism of the legal environment has impacted the structure, destination countries, industry preference, and firm-level effects of inverting firms over these timeframes. In addition, we highlight the various internal corporate governance mechanisms (board characteristics) and common accounting variables and ratios during these same periods. We find that inverting firms’ boards during our later inversion period of 2018–2022 are smaller and less experienced and accounting ratios exhibit riskier profiles than the earlier inversion time periods. Besides building on the inversion literature, our findings should be of interest to practitioners and regulators who are interested in the current trends of inversions and we highlight new industry clustering in the manufacturing and service sectors and new inversions comprise mostly cannabis companies in the wake of conflicting federal, state and securities laws.

Keywords: Corporate inversions; External governance; Internal governance; Board characteristics; Legal environment; Accounting variables (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1057/s41310-023-00186-4

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