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

Grant Richardson*, Roman Lanis, Sidney Chi-Moon Leung

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

36 Citations (Scopus)


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.

Original languageEnglish
Pages (from-to)107-121
Number of pages15
JournalJournal of Corporate Finance
Publication statusPublished - Apr 2014
Externally publishedYes


  • corporate tax aggressiveness
  • debt policy
  • outside directors
  • corporate governance


Dive into the research topics of 'Corporate tax aggressiveness, outside directors, and debt policy: an empirical analysis'. Together they form a unique fingerprint.

Cite this