Three essays in financial accounting
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Authors
Fang, Ming
Issue Date
2015-12
Type
Electronic thesis
Thesis
Thesis
Language
ENG
Keywords
Management
Alternative Title
Abstract
Chapter two studies the influence of CFO social networks on firm tax avoidance. I construct the social networks of the CFOs of US companies based on their employment history, education, and non-professional activities. I find that firms with central (well-connected) CFOs have lower effective tax rates (ETRs) than firms with non-central CFOs. Moreover, the ETR of a firm decreases if the CFO centrality of the firm increases. Furthermore, firm pairs have similar ETRs if their CFOs are socially connected, suggesting tax related information exchange among CFOs through social networks. The past ETRs of central CFOs predict the ETRs of non-central CFOs that they are socially connected with, suggesting that non-central CFOs follow central CFOs for tax planning. Overall, my findings suggest that socially well-connected CFOs have more information and resources to adopt aggressive tax strategies than not-well-connected CFOs.
Description
December 2015
School of Management
School of Management
Full Citation
Publisher
Rensselaer Polytechnic Institute, Troy, NY