The value relevance of corporate tax expenses in the presence of partisanship: International evidence |
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Affiliation: | 1. DeGroote School of Business, McMaster University, 1280 Main Street West, Hamilton, Ontario L8S 4M4, Canada;2. Facultad de Ingeniería y Ciencias Aplicadas, Universidad de los Andes, Chile. Monseñor Álvaro del Portillo 12455, Santiago, Chile |
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Abstract: | This study examines the value relevance of corporate tax expenses in an international setting and determines whether partisanship plays a role in its informativeness. Our empirical results indicate the greater value relevance of corporate taxes during the administration of right-leaning governments. Moreover, our cross-sectional analysis suggests that corporate tax expense is value-relevant during the administration of right-leaning governments; however, corporate tax expense does not convey information regarding returns when left-leaning parties are in office. These findings highlight the importance of the political orientation of tax policymakers in determining value-related information on corporate tax expenses. |
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