Topic: Corporate Tax Havens and Transparency

Speaker: Stefan Zeume, Assistant Professor in Finance, Ross School of Business, University of Michigan

Date: March 30th (Wednesday.)

Time: 2:30pm-4:00pm

Location: Building 4, Room 101

Language: English

Abstract:

In hand-collected subsidiary data on 17,331 publicly listed firms from 52 countries, we identify expropriation- related motives for establishing tax haven subsidiaries. First, Tax Information Exchange Agreements (TIEAs) increase average shareholder value of affected firms by 2.5 percent. Second, the effect is stronger for firms with more complex tax haven structures. Third, some firms respond to TIEAs by haven hopping, i.e., they move subsidiaries from affected to non-affected tax havens. Fourth, the shareholder effect is larger for firms with lower institutional ownership. This suggests that (i) tax havens are used for expropriation activities that go beyond pure tax saving activities and (ii) increased transparency is applauded by non-controlling shareholders.

About the speaker:

Stefan Zeume holds the assistant professor in Finance at Ross School of Business, University of Michigan. He earned his doctoral degree in Finance from INSEAD(France) in 2014. Dr. Zeume’s research interests include corporate finance, corporate governance, corruption, regulation and taxes.