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dc.contributor.advisorDhaliwal, Dan S.en
dc.contributor.authorGoldman, Nathan Chad
dc.creatorGoldman, Nathan Chaden
dc.date.accessioned2016-06-07T19:13:37Z
dc.date.available2016-06-07T19:13:37Z
dc.date.issued2016
dc.identifier.urihttp://hdl.handle.net/10150/612100
dc.description.abstractTax aggressiveness generates significant cash savings and information asymmetry. Combining these two consequences of tax aggressiveness, I suggest that tax aggressiveness is associated with higher agency costs of free cash flows that affect investment decisions. Using the conditional investment efficiency model, I find evidence that tax aggressiveness is associated with more investments in firms with high access to investable funds, thus suggesting tax aggressiveness is associated with overinvestment. I also provide evidence that stronger tax monitoring and a change in tax disclosures mitigate the relation between tax aggressiveness and overinvestment. Lastly, I find that the overinvestment is associated with lower future abnormal returns. Thus, my results suggest that poor managerial investment decision making is an unintended consequence to tax aggressiveness. Additionally, I further the need for shareholders and board of directors to exert influence to avoid compensating managers for aggressive tax strategies.
dc.language.isoen_USen
dc.publisherThe University of Arizona.en
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en
dc.subjectInvestment Efficiencyen
dc.subjectTax Aggressivenessen
dc.subjectManagementen
dc.subjectAgency Costs of Free Cash Flowsen
dc.titleThe Effect of Tax Aggressiveness on Investment Efficiencyen_US
dc.typetexten
dc.typeElectronic Dissertationen
thesis.degree.grantorUniversity of Arizonaen
thesis.degree.leveldoctoralen
dc.contributor.committeememberDrake, Katharine D.en
dc.contributor.committeememberSunder, Jayanthien
dc.contributor.committeememberDhaliwal, Dan S.en
dc.description.releaseRelease after 10-May-2017en
thesis.degree.disciplineGraduate Collegeen
thesis.degree.disciplineManagementen
thesis.degree.namePh.D.en
refterms.dateFOA2017-05-10T00:00:00Z
html.description.abstractTax aggressiveness generates significant cash savings and information asymmetry. Combining these two consequences of tax aggressiveness, I suggest that tax aggressiveness is associated with higher agency costs of free cash flows that affect investment decisions. Using the conditional investment efficiency model, I find evidence that tax aggressiveness is associated with more investments in firms with high access to investable funds, thus suggesting tax aggressiveness is associated with overinvestment. I also provide evidence that stronger tax monitoring and a change in tax disclosures mitigate the relation between tax aggressiveness and overinvestment. Lastly, I find that the overinvestment is associated with lower future abnormal returns. Thus, my results suggest that poor managerial investment decision making is an unintended consequence to tax aggressiveness. Additionally, I further the need for shareholders and board of directors to exert influence to avoid compensating managers for aggressive tax strategies.


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