{"title":"Tax-strategy-related words, firm’s ability, and tax avoidance","authors":"Yicheng Wang, Brian Wright","doi":"10.1057/s41310-023-00214-3","DOIUrl":null,"url":null,"abstract":"<p>This study examines the linguistic cues of tax avoidance in 10-K filings by constructing a tax-strategy-related (TSR) word list. We find a positive relationship between a firm's innate ability to avoid taxes, measured by the occurrence of TSR words, and the level of tax avoidance. Our results are robust across multiple measures and unaffected by firms' disclosure behavior or managerial ability. Additionally, investors negatively value the disclosure of TSR words in well-governed and less tax-avoiding firms.</p>","PeriodicalId":45050,"journal":{"name":"International Journal of Disclosure and Governance","volume":"28 14","pages":""},"PeriodicalIF":2.9000,"publicationDate":"2023-11-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Disclosure and Governance","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.1057/s41310-023-00214-3","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"MANAGEMENT","Score":null,"Total":0}
引用次数: 0
Abstract
This study examines the linguistic cues of tax avoidance in 10-K filings by constructing a tax-strategy-related (TSR) word list. We find a positive relationship between a firm's innate ability to avoid taxes, measured by the occurrence of TSR words, and the level of tax avoidance. Our results are robust across multiple measures and unaffected by firms' disclosure behavior or managerial ability. Additionally, investors negatively value the disclosure of TSR words in well-governed and less tax-avoiding firms.
期刊介绍：
The International Journal of Disclosure and Governance publishes a balance between academic and practitioner perspectives in law and accounting on subjects related to corporate governance and disclosure. In its emphasis on practical issues, it is the only such journal in these fields. All rigorous and thoughtful conceptual papers are encouraged.
To date, International Journal of Disclosure and Governance has published articles by a former general counsel and a former commissioner of the SEC, practitioners from Cleary Gottlieb, Skadden Arps, Wachtell Lipton, and Latham & Watkins as well as articles by academics from Harvard, Yale and NYU. The readership of the journal includes lawyers, accountants, and corporate directors and managers.
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