Military experience and corporate tax avoidance

• 成果类型: Article
• 署名作者: Law, Kelvin K. F.; Mills, Lillian F.
• 署名单位: Nanyang Technological University; University of Texas System; University of Texas Austin
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-016-9373-z
• 发表日期: 2017
• 页码: 141-184
• 关键词: world-war-ii; ceo incentives; Managers; earnings; style; college; evasion; overconfidence; Sophistication; ECONOMICS

摘要

We find that managers with military experience pursue less tax avoidance than other managers and pay an estimated $1-$2 million more in corporate taxes per firm-year. These managers also undertake less aggressive tax planning strategies with smaller tax reserves and fewer tax havens. Although they leave tax money on the table, boards hiring these managers benefit from reductions in other gray areas in corporate reporting. The broad implications are as follows: for employee selection, boards can consider employees' personal characteristics as a control mechanism when outputs are difficult to contract ex ante or measure ex post.