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Military experience and corporate tax avoidance

Author

Listed:
  • Kelvin K. F. Law

    () (Nanyang Technological University)

  • Lillian F. Mills

    () (University of Texas at Austin)

Abstract

Abstract We find that managers with military experience pursue less tax avoidance than other managers and pay an estimated $1–$2 million more in corporate taxes per firm-year. These managers also undertake less aggressive tax planning strategies with smaller tax reserves and fewer tax havens. Although they leave tax money on the table, boards hiring these managers benefit from reductions in other gray areas in corporate reporting. The broad implications are as follows: for employee selection, boards can consider employees’ personal characteristics as a control mechanism when outputs are difficult to contract ex ante or measure ex post.

Suggested Citation

  • Kelvin K. F. Law & Lillian F. Mills, 2017. "Military experience and corporate tax avoidance," Review of Accounting Studies, Springer, vol. 22(1), pages 141-184, March.
  • Handle: RePEc:spr:reaccs:v:22:y:2017:i:1:d:10.1007_s11142-016-9373-z
    DOI: 10.1007/s11142-016-9373-z
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    1. repec:eee:jbrese:v:87:y:2018:i:c:p:90-101 is not listed on IDEAS
    2. repec:eee:joacli:v:42:y:2019:i:c:p:1-28 is not listed on IDEAS
    3. Benjasak, Chonlakan & Bhattarai, Keshab, 2017. "General Equilibrium Impacts VAT and Corporate Tax in Thailand," MPRA Paper 88816, University Library of Munich, Germany, revised 01 Jul 2018.

    More about this item

    Keywords

    Tax avoidance; Corporate financial reporting; Military experience;

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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