Do Treasure Islands Create Firm Value?

Tat-kei Lai, Travis Ng

Publikation: Bidrag til konferencePaperForskningpeer review

Resumé

They do! Otherwise, their use would not have been so prevalent among firms. How
much firm value they create, however, is still an open question. Exploiting a political
event in the U.K. that suddenly raised the cost of using tax havens, we find that
there was a 0.87% reduction in cumulative abnormal return (CAR) among the sampled
firms, corresponding to about £532 million in market capitalization. The firms
of stronger corporate governance registered a stronger reduction in CAR. A simple
linear extrapolation suggests that the firm value contributed by tax havens can be as
much as £31 billion.
They do! Otherwise, their use would not have been so prevalent among firms. How
much firm value they create, however, is still an open question. Exploiting a political
event in the U.K. that suddenly raised the cost of using tax havens, we find that
there was a 0.87% reduction in cumulative abnormal return (CAR) among the sampled
firms, corresponding to about £532 million in market capitalization. The firms
of stronger corporate governance registered a stronger reduction in CAR. A simple
linear extrapolation suggests that the firm value contributed by tax havens can be as
much as £31 billion.

Konference

KonferenceThe 2014 Meeting of the Canadian Law and Economics Association
LokationUniversity of Toronto
LandCanada
ByToronto
Periode19/09/201420/09/2014
Internetadresse

Emneord

  • Tax havens
  • Firm value
  • Corporate governance
  • Corporate tax
  • Event study

Citer dette

Lai, T., & Ng, T. (2014). Do Treasure Islands Create Firm Value?. Afhandling præsenteret på The 2014 Meeting of the Canadian Law and Economics Association, Toronto, Canada.
Lai, Tat-kei ; Ng, Travis. / Do Treasure Islands Create Firm Value?. Afhandling præsenteret på The 2014 Meeting of the Canadian Law and Economics Association, Toronto, Canada.37 s.
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Lai, T & Ng, T 2014, 'Do Treasure Islands Create Firm Value?' Paper fremlagt ved The 2014 Meeting of the Canadian Law and Economics Association, Toronto, Canada, 19/09/2014 - 20/09/2014, .

Do Treasure Islands Create Firm Value? / Lai, Tat-kei; Ng, Travis.

2014. Afhandling præsenteret på The 2014 Meeting of the Canadian Law and Economics Association, Toronto, Canada.

Publikation: Bidrag til konferencePaperForskningpeer review

TY - CONF

T1 - Do Treasure Islands Create Firm Value?

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AU - Ng,Travis

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N2 - They do! Otherwise, their use would not have been so prevalent among firms. Howmuch firm value they create, however, is still an open question. Exploiting a politicalevent in the U.K. that suddenly raised the cost of using tax havens, we find thatthere was a 0.87% reduction in cumulative abnormal return (CAR) among the sampledfirms, corresponding to about £532 million in market capitalization. The firmsof stronger corporate governance registered a stronger reduction in CAR. A simplelinear extrapolation suggests that the firm value contributed by tax havens can be asmuch as £31 billion.

AB - They do! Otherwise, their use would not have been so prevalent among firms. Howmuch firm value they create, however, is still an open question. Exploiting a politicalevent in the U.K. that suddenly raised the cost of using tax havens, we find thatthere was a 0.87% reduction in cumulative abnormal return (CAR) among the sampledfirms, corresponding to about £532 million in market capitalization. The firmsof stronger corporate governance registered a stronger reduction in CAR. A simplelinear extrapolation suggests that the firm value contributed by tax havens can be asmuch as £31 billion.

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KW - Event study

M3 - Paper

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Lai T, Ng T. Do Treasure Islands Create Firm Value?. 2014. Afhandling præsenteret på The 2014 Meeting of the Canadian Law and Economics Association, Toronto, Canada.