Banking deregulation and corporate tax avoidance

Banking deregulation and corporate tax avoidance

Blog Article

We investigate whether tax avoidance substitutes for external financing.We exploit interstate bottle opener banking deregulation as a quasi-external shock to examine whether firms engage in less tax avoidance after banking deregulation, because of cheaper and easier access to credit from banks.We find no empirical SEA SALT evidence to support this substitutive relation, even for firms with higher financial constraints or firms with higher external financing dependence.