Corporate tax aggressiveness, outside directors, and debt policy: An empirical analysis

Grant Richardson, Roman Lanis and Sidney Chi-Moon Leung

Journal of Corporate Finance, 2014, vol. 25, issue C, 107-121

Abstract: This study examines the influence of corporate tax aggressiveness on corporate debt policy (the debt-substitution effect) and the influence of outside directors on both debt and the debt-substitution effect. Based on a sample of 6967 firm-year observations over the 2001–2010 period, we find that tax aggressiveness is negatively correlated with debt. We also observe a negative correlation between debt and the proportion of outside directors on the board, and find that outside directors magnify the debt-substitution effect. Finally, we obtain similar results in analysis based on firms' debt issuance decisions.

Keywords: Corporate tax aggressiveness; Debt policy; Outside directors; Corporate governance (search for similar items in EconPapers)
JEL-codes: G3 H2 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:25:y:2014:i:c:p:107-121

DOI: 10.1016/j.jcorpfin.2013.11.010

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