Corporate tax aggressiveness and the maturity structure of debt

Thomas R. Kubick and G. Brandon Lockhart

Advances in accounting, 2017, vol. 36, issue C, 50-57

Abstract: We investigate the association between tax aggressiveness and corporate debt maturity, and we find strong evidence that shorter debt maturity is more prevalent for tax aggressive firms. The results survive numerous robustness tests, including controlling for compensation-induced incentives for risk-taking, firm and CEO effects, changes regressions, and instrumental variables estimation. The results suggest that lenders view tax aggressiveness as a risky activity and therefore restrict the maturity structure of debt to provide a monitoring mechanism for debt contracts with tax-aggressive borrowers. We conclude that tax aggressiveness has a meaningful influence on debt contracting.

Keywords: Tax aggressiveness; Tax sheltering; Debt maturity; Leverage; Agency costs of debt (search for similar items in EconPapers)
JEL-codes: G21 G32 H26 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:advacc:v:36:y:2017:i:c:p:50-57

DOI: 10.1016/j.adiac.2016.10.001

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