 Asset Redeployability and Corporate Tax AvoidanceMostafa Monzur Hasan, Ahsan Habib and Nurul Alam Abacus, 2021, vol. 57, issue 2, 183-219 Abstract: Using a large sample of US data, we examine the relationship between asset redeployability and corporate tax avoidance. We also examine the extent to which asset redeployability influences tax avoidance directly and indirectly (through financing constraints channel). We find a significant negative relationship between asset redeployability and tax avoidance, implying that firms with more redeployable assets tend to engage in less tax avoidance. We also confirm that asset redeployability reduces tax avoidance both directly and indirectly (through reducing financing constraints). These results are robust to alternative specifications of asset redeployability and corporate tax avoidance, and to the use of a two‐stage least squares (2SLS) analysis to mitigate any endogeneity concerns relating to omitted variables, reverse causality, and model misspecification. Overall, these findings extend our existing understanding of the implication of asset redeployability in an accounting context and demonstrate that redeployability of assets has important implication for corporate tax planning. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:abacus:v:57:y:2021:i:2:p:183-219 Ordering information: This journal article can be ordered from 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 |
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