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Article Dans Une Revue Journal of Corporate Finance Année : 2024

Offshore activities and corporate tax avoidance

Ole-Kristian Hope
  • Fonction : Auteur
Qingyuan Li
  • Fonction : Auteur
Yongbo Li
  • Fonction : Auteur
  • PersonId : 1371885

Résumé

We investigate the relation between tax avoidance and offshore activities using a new text-based measure for offshore activities based on Hoberg and Moon (2017, 2019). Our evidence shows that, although providing cross-border tax-avoidance opportunities, offshore activities reduce the marginal benefits of tax avoidance by introducing incremental foreign-market risk exposure. We find that the intensity of offshore sales of outputs is positively associated with the cash effective tax rate. The effect is stronger when the offshore sales rely on overseas production rather than domestic production, when the offshore sales are located in countries with higher economic uncertainty, when the firm has a lower ability to pass on shocks, and when the firm has less flexibility in adjusting tax strategies.
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Dates et versions

hal-04535146 , version 1 (16-04-2024)

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Zhihong Chen, Ole-Kristian Hope, Qingyuan Li, Yongbo Li. Offshore activities and corporate tax avoidance. Journal of Corporate Finance, 2024, 85, ⟨10.1016/j.jcorpfin.2023.102536⟩. ⟨hal-04535146⟩

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