Cross‐border cooperation and tax avoidance of U.S. cross‐listed firms

IF 9.4 3区 管理学 Q1 BUSINESS, FINANCE Journal of International Financial Management & Accounting Pub Date : 2024-09-17 DOI:10.1111/jifm.12221
Donghe Yang, Gaoguang (Stephen) Zhou, Xindong (Kevin) Zhu
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Abstract

We investigate how cross‐border cooperation formed by the Multilateral Memorandum of Understanding (MMoU) affects tax avoidance of foreign firms cross‐listed in the U.S. Prior studies show that the MMoU enhances U.S. SEC's regulatory oversight of foreign firms and increases such firms' corporate governance. We utilize data from 27 jurisdictions from 2000 to 2009 and find that U.S. cross‐listed firms mitigate tax avoidance more than do their home‐listed peers after their home jurisdictions become signatories of the MMoU. Our further analyses reveal that improved information environment and enhanced foreign institutional investor monitoring are two possible underlying mechanisms, consistent with the complementarity theory of tax avoidance that self‐serving managers can employ tax avoidance to divert assets when corporate governance is ineffective. We also show that the effect of the MMoU increases with U.S. IRS monitoring and the strength of institutional regimes in foreign firms' home jurisdictions. Collectively, our findings elucidate unintended consequences of the MMoU and provide implications for practitioners and regulators.
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美国交叉上市公司的跨境合作与避税
我们研究了《多边谅解备忘录》(MMoU)所形成的跨境合作如何影响在美国交叉上市的外国公司的避税行为。先前的研究表明,《多边谅解备忘录》加强了美国证券交易委员会对外国公司的监管,并提高了这些公司的公司治理水平。我们利用 2000 年至 2009 年 27 个司法管辖区的数据发现,在美国交叉上市的公司在其母国签署《多边谅解备忘录》后,避税行为的缓解程度要高于其母国上市的同行。我们的进一步分析表明,信息环境的改善和外国机构投资者监督的加强是两个可能的内在机制,这与避税的互补理论是一致的,即当公司治理无效时,自利的管理者可以利用避税来转移资产。我们还发现,随着美国国税局的监管力度和外国公司母辖区机构制度的强度增加,MMoU 的影响也会增加。总之,我们的研究结果阐明了《多边谅解备忘录》的意外后果,并为从业者和监管者提供了启示。
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来源期刊
CiteScore
9.10
自引率
2.00%
发文量
23
期刊介绍: The Journal of International Financial Management & Accounting publishes original research dealing with international aspects of financial management and reporting, banking and financial services, auditing and taxation. Providing a forum for the interaction of ideas from both academics and practitioners, the JIFMA keeps you up-to-date with new developments and emerging trends.
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