Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212278 
Year of Publication: 
2014
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 3/2014
Publisher: 
Bank of Finland, Helsinki
Abstract: 
We find that firms with greater tax avoidance incur higher spreads when obtaining bank loans. This finding is robust in a battery of sensitivity analyses and in two quasi-experimental settings including the implementation of Financial Accounting Standards Board Interpretation No. 48 and the revelation of past tax sheltering activity. Firms with greater tax avoidance also incur more stringent non-price loan terms, incur higher at-issue bond spreads, and prefer bank loans over public bonds when obtaining debt financing. Overall, these findings indicate that banks perceive tax avoidance as engendering significant risks.
Subjects: 
Tax avoidance
Cost of bank loans
Information risk
Agency risk
Audit risk
FIN 48
JEL: 
G21
H26
Persistent Identifier of the first edition: 
ISBN: 
978-952-6699-65-3
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.