Arbeitspapier
Beauty is in the eye of the beholder: The effect of corporate tax avoidance on the cost of bank loans
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 non-price 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.
- ISBN
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978-952-6699-65-3
- Language
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Englisch
- Bibliographic citation
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Series: Bank of Finland Research Discussion Papers ; No. 3/2014
- Classification
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Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Tax Evasion and Avoidance
- Subject
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Tax avoidance
Cost of bank loans
Information risk
Agency risk
Audit risk
FIN 48
- Event
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Geistige Schöpfung
- (who)
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Hasan, Iftekhar
Wu, Qiang
Zhang, Hao
Hoi, Chun-Keung (Stan)
- Event
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Veröffentlichung
- (who)
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Bank of Finland
- (where)
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Helsinki
- (when)
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2014
- Handle
- Last update
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10.03.2025, 11:45 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Hasan, Iftekhar
- Wu, Qiang
- Zhang, Hao
- Hoi, Chun-Keung (Stan)
- Bank of Finland
Time of origin
- 2014
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