The Internal Revenue Code allows firms to carry excess tax losses forward to offset future taxable income and reduce taxes. Consistent with tax loss carryforwards (TLCFs) creating a significant asset, prior research finds investors positively value TLCFs. However, investors face significant...

Prior research documents substantial variation in firms' tax avoidance activities and questions why some firms choose not to take advantage of the apparent benefits of tax planning (i.e., the "undersheltering puzzle"). We provide additional insight into the undersheltering puzzle by...

This study examines whether factors that influence firms' overall investment strategies also influence the decision to invest in a tax shelter. Our results suggest that firms with large investment opportunity sets are less likely to invest in tax shelters. We also find that firms with greater...

This study investigates whether expected economic growth is associated with corporate tax planning. We predict that higher expected economic growth increases the net present value of tax planning opportunities and thus increases investment in tax planning. Consistent with our prediction, we find...

Using the Credit Rating Agency Reform Act of 2006, we examine the credibility of mandatory disclosure by credit rating agencies (CRAs) on managerial learning from stock prices. We find an increase in investment-price sensitivity for firms affected by the Act. Consistent with managers relying...

Amid growing globalization, many countries have offered significant tax incentives to attract corporate investment. Prior research studies the role such tax incentives play in firms' location and investment choices. However, we have limited evidence on the role tax enforcement plays in those...