Customer-Supplier Relationships and Corporate Tax Avoidance
By Ling Cen, Edward L. Maydew, Liandong Zhang, Luo Zuo. 2017
354 citations recorded by the source corpus.
We investigate whether firms in close customer–supplier relationships are better able to identify and implement tax avoidance strategies via supply chains. Consistent with our prediction, we find that both principal customers and their dependent suppliers avoid more taxes than other firms. Further analysis suggests that principal customers and dependent suppliers likely engage in tax strategies involving shifting profits to tax haven subsidiaries. Moreover, tax benefits appear to explain both principal customer firms’ and dependent supplier firms’ organizational decisions. Overall, our study provides evidence of the importance of tax avoidance as a source of gains from these relationships.
Subfields: Accounting, Economics and Econometrics
View Paper: https://www.semanticscholar.org/paper/841840896f96cfe062a2c23f3c0de33c4a956baa
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In Accounting
In Economics and Econometrics
Citations in the corpus
- Climate Change and Adaptation in Global Supply-Chain Networks (2019, methodology): “Following the literature (e.g. Kale and Shahrur, 2007; Banerjee et al., 2008; Barrot and Sauvagnat, 2016; Campello and Gao, 2017; Cen et al., 2017; Phua, Tham, and Wei, 2018), we collapse our supplier-customer panel at the customer-year-quarter level and estimate OLS regressions of the following for”