TY - JOUR
T1 - Corporate tax aggressiveness, outside directors, and debt policy
T2 - an empirical analysis
AU - Richardson, Grant
AU - Lanis, Roman
AU - Leung, Sidney Chi-Moon
PY - 2014/4
Y1 - 2014/4
N2 - 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.
AB - 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.
KW - corporate tax aggressiveness
KW - debt policy
KW - outside directors
KW - corporate governance
UR - http://www.scopus.com/inward/record.url?scp=84890174139&partnerID=8YFLogxK
U2 - 10.1016/j.jcorpfin.2013.11.010
DO - 10.1016/j.jcorpfin.2013.11.010
M3 - Article
AN - SCOPUS:84890174139
SN - 0929-1199
VL - 25
SP - 107
EP - 121
JO - Journal of Corporate Finance
JF - Journal of Corporate Finance
ER -