No. 34: Corporate Tax Avoidance and the Real Effects of Taxation: A Review

Abstract

The tax literature of the past two decades has been dominated by empirical studies on corporate tax avoidance and a growing literature on the real effects of taxation. However, this literature lacks a quantitative synthesis of these studies and an in-depth discussion of potential convergences and divergences in empirical findings. To thoroughly evaluate empirical results, we provide a comprehensive theoretical framework that allows us not only to organize the literature, but also to identify underexplored yet fruitful areas for future research. We link our theoretical predictions to a quantitative synthesis of all empirical tax studies published in the top accounting, finance, and economics journals over the last two decades. Combining theoretical predictions with a quantitative synthesis allows us to identify potential empirical inconsistencies and areas for future tax research.

Participating Institutions

TRR 266‘s main locations are Paderborn University, HU Berlin, and University of Mannheim. All three locations have been centers for accounting and tax research for many years. They are joined by researchers from LMU Munich, Frankfurt School of Finance and Management, WHU – Otto Beisheim School of Management, European School of Management and Technology in Berlin and Goethe University Frankfurt who share the same research agenda.