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Title: Labor unions and tax aggressiveness
Authors: Chyz, J.A.
Ching Leung, W.S.
Zhen Li, O. 
Meng Rui, O.
Keywords: Labor union
Tax aggressiveness
Issue Date: Jun-2013
Citation: Chyz, J.A., Ching Leung, W.S., Zhen Li, O., Meng Rui, O. (2013-06). Labor unions and tax aggressiveness. Journal of Financial Economics 108 (3) : 675-698. ScholarBank@NUS Repository.
Abstract: We examine the impact of unionization on firms' tax aggressiveness. We find a negative association between firms' tax aggressiveness and union power and a decrease in tax aggressiveness after labor union election wins. This relation is consistent with labor unions influencing managers' in one, or both, of two ways: (1) constraining managers' ability to invest in tax aggressiveness through increased monitoring; or (2) decreasing returns to tax aggressiveness that arise from unions' rent seeking behavior. We also find preliminary evidence that the market expects these reductions around union elections and discounts firms that likely add shareholder value via aggressive tax strategies. © 2013 Elsevier B.V.
Source Title: Journal of Financial Economics
ISSN: 0304405X
DOI: 10.1016/j.jfineco.2013.01.012
Appears in Collections:Staff Publications

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