Customer-supplier relationships and corporate tax avoidance

• 成果类型: Article
• 署名作者: Cen, Ling; Maydew, Edward L.; Zhang, Liandong; Zuo, Luo
• 署名单位: University of Toronto; University Toronto Scarborough; University of Toronto; University of North Carolina; University of North Carolina Chapel Hill; City University of Hong Kong; Cornell University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2016.09.009
• 发表日期: 2017
• 页码: 377-394
• 关键词: Tax avoidance; customers; Suppliers; Industrial Organization; supply chain

摘要

We investigate whether firms in close customer supplier relationships are better able to identify and implement tax avoidance strategies via supply chains. Consistent with our prediction, we find that both principal customers and their dependent suppliers avoid more taxes than other firms. Further analysis suggests that principal customers and dependent suppliers likely engage in tax strategies involving shifting profits to tax haven subsidiaries. Moreover, tax benefits appear to explain both principal customer firms' and dependent supplier firms' organizational decisions. Overall, our study provides evidence of the importance of tax avoidance as a source of gains from these relationships. (C) 2016 Elsevier B.V. All rights reserved.