Tax Avoidance, Managerial Ability, and Investment Efficiency

Inder K. Khurana, William J. Moser and K. K. Raman

Abacus, 2018, vol. 54, issue 4, 547-575

Abstract: In this paper, we examine the impact of managerial ability on the relation between corporate tax avoidance and investment efficiency. Using a sample of US firms from 1994–2015, we find that as tax avoidance increases, firms with high (low) managerial ability exhibit increased (reduced) investment efficiency, that is, smaller (greater) deviations from predicted levels of investment spending. Supplemental analysis also shows that as tax avoidance increases, strong (weak) corporate governance increases (decreases) investment efficiency. Overall, our findings shed light on whether corporate tax avoidance generates wealth for the firm's shareholders or simply exacerbates agency problems.

Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

Downloads: (external link)
https://doi.org/10.1111/abac.12142

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:abacus:v:54:y:2018:i:4:p:547-575

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0001-3072

Access Statistics for this article

Abacus is currently edited by G.W. Dean and S. Jones

More articles in Abacus from Accounting Foundation, University of Sydney
Bibliographic data for series maintained by Wiley Content Delivery ().