Customer-supplier relationships and corporate tax avoidance
We investigate whether firms in close customer-supplier relationships are better able to identify and implement tax avoidance strategies via supply chains. Consistent with our prediction, we find that both principal customers and their dependent suppliers avoid more taxes than other firms. Further a...
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2017
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sg-smu-ink.soa_research-27302018-05-28T09:29:08Z Customer-supplier relationships and corporate tax avoidance CEN, Ling MAYDEW, Edward L. ZHANG, Liandong ZUO, Luo We investigate whether firms in close customer-supplier relationships are better able to identify and implement tax avoidance strategies via supply chains. Consistent with our prediction, we find that both principal customers and their dependent suppliers avoid more taxes than other firms. Further analysis suggests that principal customers and dependent suppliers likely engage in tax strategies involving shifting profits to tax haven subsidiaries. Moreover, tax benefits appear to explain both principal customer firms’ and dependent supplier firms’ organizational decisions. Overall, our study provides evidence of the importance of tax avoidance as a source of gains from these relationships. 2017-01-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/soa_research/1703 info:doi/10.1016/j.jfineco.2016.09.009 https://ink.library.smu.edu.sg/context/soa_research/article/2730/viewcontent/CustomerSupplierRelationshipsCorporateTaxAvoidance_2016.pdf http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Accountancy eng Institutional Knowledge at Singapore Management University Customers Industrial organization Suppliers Supply chain Tax avoidance Accounting Corporate Finance |
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Customers Industrial organization Suppliers Supply chain Tax avoidance Accounting Corporate Finance CEN, Ling MAYDEW, Edward L. ZHANG, Liandong ZUO, Luo Customer-supplier relationships and corporate tax avoidance |
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We investigate whether firms in close customer-supplier relationships are better able to identify and implement tax avoidance strategies via supply chains. Consistent with our prediction, we find that both principal customers and their dependent suppliers avoid more taxes than other firms. Further analysis suggests that principal customers and dependent suppliers likely engage in tax strategies involving shifting profits to tax haven subsidiaries. Moreover, tax benefits appear to explain both principal customer firms’ and dependent supplier firms’ organizational decisions. Overall, our study provides evidence of the importance of tax avoidance as a source of gains from these relationships. |
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CEN, Ling MAYDEW, Edward L. ZHANG, Liandong ZUO, Luo |
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CEN, Ling MAYDEW, Edward L. ZHANG, Liandong ZUO, Luo |
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CEN, Ling |
title |
Customer-supplier relationships and corporate tax avoidance |
title_short |
Customer-supplier relationships and corporate tax avoidance |
title_full |
Customer-supplier relationships and corporate tax avoidance |
title_fullStr |
Customer-supplier relationships and corporate tax avoidance |
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Customer-supplier relationships and corporate tax avoidance |
title_sort |
customer-supplier relationships and corporate tax avoidance |
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Institutional Knowledge at Singapore Management University |
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2017 |
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https://ink.library.smu.edu.sg/soa_research/1703 https://ink.library.smu.edu.sg/context/soa_research/article/2730/viewcontent/CustomerSupplierRelationshipsCorporateTaxAvoidance_2016.pdf |
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