This paper documents that firms led by Chief Executive Officers (CEOs) with greater network power and influence are more likely to be subject to securities class action (SCA) lawsuits, and that these lawsuits are more likely to led by institutional investors. Firms with more connected CEOs are...

Using an agency model of firm behavior, the paper analyzes whether the cost of investment should be tax exempt. The findings suggest that, when managers engage in wasteful capital expenditures, welfare may decline if the cost of investment is tax deductible, as commonly advocated. The extent to...

We derive determinants of tax avoidance by means of a multi-task principal-agent model. We extend prevailing models by integrating both corporate and individual income taxation as well as by including tax planning effort in the agent’s action portfolio. Our model shows novel and apparently...