This manuscript develops a model that incorporates income shifting into investments by U.S. multinationals in their foreign subsidiaries. The model demonstrates that, while there is always an incentive to shift income into the U.S. from high foreign tax rate subsidiaries, income shifting out of...

We shed light on whether stock option repricings are in the best interests of shareholders by conducting an event study that uses non-contaminated and timely announcements of stock option repricings by Canadian firms. While U.S. firms publicly disclose their repricings in proxy statements months...

In this study, we shed light on the combined effect of corporate income tax and other government policies on multinational corporations’ (MNCs) strategic location and relocation of intellectual property. Using granular affiliate-level data for worldwide MNCs, we show that the location of...

We examine the role that political-economic factors play in shaping financial analyst bias using a series of scheduled provincial elections in China. Theory on political business cycles holds that, in a short period prior to these political events, provincial politicians have stronger incentives...

We examine whether managers’ activities in striving to reach earnings targets affect their firms’ product quality. We find that firms suspected of manipulating real activities in trying to meet earnings benchmarks exhibit a higher likelihood and frequency of product recalls. Other evidence...

We investigate the link between foreign competition and corporate tax planning. We find that a one standard deviation increase in import competition leads to a reduction of 9% in firms’ effective tax rates relative to standard levels. Further, we document that our evidence is robust to a...