Beauty is in the eye of the beholder: : The effect of corporate tax avoidance on the cost of bank loans

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dc.contributor Bank of Finland
dc.contributor.author Hasan, Iftekhar
dc.contributor.author Wu, Qiang
dc.contributor.author Zhang, Hao
dc.contributor.author Hoi, Chun-Keung (Stan)
dc.date.accessioned 2014-09-22T07:59:15Z
dc.date.available 2014-09-22T07:59:15Z
dc.date.issued 2014
dc.identifier.isbn 978-952-6699-65-3
dc.identifier.issn 1456-6184
dc.identifier.uri https://helda.helsinki.fi/bof/handle/123456789/7940
dc.description Ilmestynyt myös JOURNAL OF FINANCIAL ECONOMICS 2014.
dc.description.abstract We find that firms with greater tax avoidance incur higher spreads when obtaining bank loans. This finding is robust in a battery of sensitivity analyses and in two quasi-experimental settings including the implementation of Financial Accounting Standards Board Interpretation No. 48 and the revelation of past tax sheltering activity. Firms with greater tax avoidance also incur more stringent non-price loan terms, incur higher at-issue bond spreads, and prefer bank loans over public bonds when obtaining debt financing. Overall, these findings indicate that banks perceive tax avoidance as engendering significant risks. JEL Classification: G21; H26 Keywords: Tax avoidance; Cost of bank loans; Information risk; Agency risk; Audit risk; FIN 48
dc.format.extent 67
dc.language.iso eng
dc.rights https://helda.helsinki.fi/bof/copyright
dc.subject yritykset
dc.subject verotus
dc.subject pankkitoiminta
dc.subject luotot
dc.subject kustannukset
dc.subject rahoitus
dc.subject riskit
dc.subject joukkovelkakirjat
dc.subject SP
dc.subject RP
dc.subject veronkierto
dc.title Beauty is in the eye of the beholder: : The effect of corporate tax avoidance on the cost of bank loans
dc.type Sarjajulkaisu
dc.identifier.urn URN:NBN:fi:bof-20140807160
dc.subject.jel G21
dc.subject.jel H26
dc.series.name Bank of Finland Research Discussion Papers
dc.series.year 2014
dc.series.number 3/2014
dc.series.sortingnumber 0003
dc.date.publication 14.1.2014
dc.identifier.doi 10.1016/j.jfineco.2014.03.004
dc.description.publication Published in Journal of Financial Economics, 113 (2014) 109-130

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