Beauty is in the eye of the beholder: The effect of corporate tax avoidance on the cost of bank loans

• 成果类型: Article
• 署名作者: Hasan, Iftekhar; Hoi, Chun Keung (Stan); Wu, Qiang; Zhang, Hao
• 署名单位: Fordham University; Bank of Finland; Rochester Institute of Technology; Rensselaer Polytechnic Institute
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2014.03.004
• 发表日期: 2014
• 页码: 109-130
• 关键词: Tax avoidance; Cost of bank loans; Information risk; Agency risk; FIN 48

摘要

We find that firms with greater tax avoidance incur higher spreads when obtaining bank loans. This finding is robust in a battery of sensitivity analyses and in two quasi-experimental settings including the implementation of Financial Accounting Standards Board Interpretation No. 48 and the revelation of past tax sheltering activity. Firms with greater tax avoidance also incur more stringent nonprice loan terms, incur higher at-issue bond spreads, and prefer bank loans over public bonds when obtaining debt financing. Overall, these findings indicate that banks perceive tax avoidance as engendering significant risks. (C) 2014 Elsevier B.V. All rights reserved.