دانلود رایگان مقاله انگلیسی اجتناب از مالیات و هزینه بدهی: کاهش ریسک ویژه وام و تامین مالی بدهی - الزویر 2018

ABSTRACT

Examining the syndicate loans market for publicly traded U.S. firms I show that tax avoidance is positively related to loan spreads. Importantly, however, tax-specific premiums disappear for loans with large number of co-leads, which facilitate credit risk diversification, for loans with performance pricing provisions, which facilitate borrower-lender incentive alignment, and for borrowers with CDS contracts, which facilitate credit risk transfer. Moreover, non-bank institutional investors demand higher risk premiums to compensate for their high-risk investment strategies that also account for tax-specific risks and do not have particular focus on tax-specific firm risks. Finally, I show that simultaneous access to private and public debt financing, which reflects greater firmlevel financial flexibility and fewer hold-up problems, largely mitigates agency risks associated with all forms of tax avoidance. These syndicate-level risk-mitigating measures work jointly well and are more effective, ex-ante, at moderating tax-specific risks in comparison to maintenance-based covenant structures alone. These results help identify channels through which firms can mitigate non-tax costs associated with tax avoidance and, hence, effectively pursue strategies that persistently reduce their corporate tax liabilities without incurring material agency costs.

8. CONCLUSION

In this paper, I revisit and significantly expand the empirical evidence quantifying contracting costs associated with corporate tax avoidance (Shevlin et al., 2013; Hasan et al., 2014) and bring forth novel thinking towards some of the most relevant and timely issues in finance and banking literatures. First, the paper distinguishes itself from the tax literature (Shevlin et al., 2013; Hasan et al., 2014) by incorporating recent advances in loan formation and covenant design alternatives into the analysis, including increasing tendency to co-syndicate deal structures and the application of performance-based pricing provisions. I find that the standalone tax-specific risk premiums documented in the literature (Shevlin et al., 2013; Hasan et al., 2014) are largely eliminated for loans with high co-syndication intensity, which facilitates credit risk diversification, and for loans with performance-sensitive provisions, which facilitate borrower-lender incentive alignment. Moreover, the ability to transfer loan-specific risks back into the financial system via CDS contracts substantially alleviates standalone risks associated with tax avoidance.

Furthermore, the analysis documents a strong negative link between simultaneous access to public and private debt financing and the contracting costs of tax avoidance. In line with the hold-up costs associated with singlebank lending (e.g., Rajan, 1992,; Houston and James, 1996; Santos and Winton, 2008; Hale and Santos, 2009; Ioannidou and Ongena, 2010; Schenone, 2010), I find that access to public debt financing, which facilitates superior financial flexibility and informational environment (Cantillo and Wright, 2000; James and Smith, 2000), helps alleviate potentially escalated agency costs associated with corporate tax avoidance (Desai and Dharmapala, 2006,; Desai et al., 2007; Balakrishnan et al., 2011). These results are important given that the prior literature implicitly assumes that firms hold either bank-originated or arm’s length public debt financing but not both facilities concurrently (Shevlin et al., 2013; Hasan et al., 2014). Moreover, the results also extend the empirical evidence on the inefficient hold-up problems associated with relationship-focused bank financing (Santos and Winton, 2008; Hale and Santos, 2009; Ioannidou and Ongena, 2010) into the corporate tax avoidance setting within the agency-theory framework.