Financial distress, outside directors and corporate tax aggressiveness spanning the global financial crisis

an empirical analysis

Grant Richardson*, Roman Lanis, Grantley Taylor

*Corresponding author for this work

Research output: Contribution to journalArticle

24 Citations (Scopus)

Abstract

We examine financial distress and tax aggressiveness spanning the global financial crisis (GFC) of 2008 and the impact of the interaction between board independence and firm-specific financial distress on tax aggressiveness. Our regression results show that both financial distress and the GFC are positively associated with tax aggressiveness. More importantly, we find that the positive association between financial distress and tax aggressiveness is magnified by the GFC. We also observe that the interaction between board independence and financial distress is positively associated with tax aggressiveness. Our results are robust to multiple measures of financial distress and tax aggressiveness.

Original languageEnglish
Pages (from-to)112-129
Number of pages18
JournalJournal of Banking and Finance
Volume52
DOIs
Publication statusPublished - Mar 2015
Externally publishedYes

Keywords

  • financial distress
  • outside directors
  • tax aggressiveness
  • global financial crisis

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