Abstract
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.
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.
| Original language | English |
|---|---|
| Publication date | 30 Sept 2014 |
| Number of pages | 37 |
| Publication status | Published - 30 Sept 2014 |
| Event | The 2014 Meeting of the Canadian Law and Economics Association - University of Toronto, Toronto, Canada Duration: 19 Sept 2014 → 20 Sept 2014 http://www.canlecon.org/index.php/CLEA/CLEA2014 |
Conference
| Conference | The 2014 Meeting of the Canadian Law and Economics Association |
|---|---|
| Location | University of Toronto |
| Country/Territory | Canada |
| City | Toronto |
| Period | 19/09/2014 → 20/09/2014 |
| Internet address |