Home > Publications . Search All . Browse All . Country . Browse PSC Pubs . PSC Report Series

PSC In The News

RSS Feed icon

Starr's findings account for some of the 19% black-white gap in federal sentencing

Frey says suburbs are aging, cities draw millennials

Pfeffer comments on Fed report that reveals 20-year decline in net worth among American families

More News

Highlights

U-M's campus climate survey results discussed in CHE story

U-M honors James Jackson's groundbreaking work on how race impacts the health of black Americans

U-M is the only public and non-coastal university on Forbes' top-10 list for billionaire production

ASA President Bonilla-Silva takes exception with Chief Justice Roberts' 'gobbledygook' jab

More Highlights

Next Brown Bag

Mon, Jan 22, 2018, noon: Narayan Sastry

What does tax aggressiveness signal? Evidence from stock price reactions to news about tax shelter involvement

Archived Abstract of Former PSC Researcher

Hanlon, Michelle, and Joel Slemrod. 2009. "What does tax aggressiveness signal? Evidence from stock price reactions to news about tax shelter involvement." Journal of Public Economics, 93(1-2): 126-141.

We study the stock price reaction to news about corporate tax aggressiveness. We find that, on average, a company's stock price declines when there is news about its involvement in tax shelters. We find some limited evidence for cross-sectional variation in the reaction. For example, the reaction is more negative for firms in the retail sector, suggesting that part of the reaction may be a consumer/taxpayer backlash. In addition, the reaction is less negative for firms that are viewed to be generally less tax aggressive, as proxied by the firm's cash effective tax rate. We interpret this as being consistent with the market reacting positively to evidence that a firm is trying to reduce taxes when their financial reports would lead one to believe the firm is not tax aggressive. (c) 2008 Elsevier B.V. All rights reserved.

DOI:10.1016/j.jpubeco.2008.09.004 (Full Text)

Country of focus: United States of America.

Browse | Search : All Pubs | Next