Do Treasure Islands Create Firm Value?

Tat-kei Lai, Travis Ng

Research output: Contribution to conferencePaperResearchpeer-review

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.
Original languageEnglish
Publication date30 Sep 2014
Number of pages37
Publication statusPublished - 30 Sep 2014
EventThe 2014 Meeting of the Canadian Law and Economics Association - University of Toronto, Toronto, Canada
Duration: 19 Sep 201420 Sep 2014
http://www.canlecon.org/index.php/CLEA/CLEA2014

Conference

ConferenceThe 2014 Meeting of the Canadian Law and Economics Association
LocationUniversity of Toronto
CountryCanada
CityToronto
Period19/09/201420/09/2014
Internet address

Cite this

Lai, T., & Ng, T. (2014). Do Treasure Islands Create Firm Value?. Paper presented at The 2014 Meeting of the Canadian Law and Economics Association, Toronto, Canada.