Tax Avoidance as a Driver of Mergers and Acquisitions

Belz, Thomas; Robinson, Leslie A.; Ruf, Martin; Steffens, Christian

doi:10.2139/ssrn.2371706

Cited by 29 publications

(32 citation statements)

References 9 publications

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“…Similar results was found in the studies of Ravenscraft and Scherer (1989), Clark and Ofek (1994) and Tropina (2015). Belz et al (2013) argued that this decrease in target operating performance following M&As (consistent with previous results) may be partially explained by tax motivated transfer pricing.…”

Section: Literature Reviewsupporting

confidence: 87%

“…Thus, the sample processing and examination in the study were Accounting data analysis with financial statements and ratios provide useful information regarding companies" merger decisions in general and more specifically on taxation issues (Auerbach and Reishus, 1987a;Landsman and Shackelford, 1995;Chatterjee and Meeks, 1996;Seetharaman et al, 2008;Becker and Fuest, 2011;Belz et al, 2013). All the ratios that were used are presented and analyzed in Table 1.…”

Section: Methodology Accounting Measures-quantitative Variablesmentioning

confidence: 99%

“…On the other hand, if there is a different tax code for both income within and outside the country, tax competition leads to negative financial consequences that result in inefficiently high tax rates. Belz et al (2013) analysed the post-merger operating performance of the target firm. They compared three indicators of tax avoidance at the target before and after the deal:…”

Section: Literature Reviewmentioning

confidence: 99%

“…Firms with M&As try to gain access to new resources in several business sectors and, by way of the resource redeployment, increase revenues and reduce cost (Philippatos et al, 1985;Neely and Rochester, 1987;Eccles et al, 1999;Leepsa and Mishra, 2013;Omoye and Aniefor, 2016). The new management strategies, after the change of the control, could increase postmerger performance, as it is reported in the financial statements of a firm (Belz et al, 2013). Despite the fact that many researchers are very enthusiastic about the merger effects, some others are sceptic about this approach (Ramaswamy and Waegelein, 2003;Stunda, 2014;Tao et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

“…Accounting performance and the examination of the financial statements of a firm are partially connected to the effects of a merger decision and tax issues, while the taxation is a major factor that may influences the choice of the exact form of corporate restructuring (Auerbach and Reishus, 1987a;Landsman and Shackelford, 1995;Ayers et al, 2007;Becker and Fuest, 2011;Belz et al, 2013). Also, there is no common methodology with universal acceptance in past research for the impact of opportunity at mergers to carry over net operating losses and unused tax credits or depreciation new policies of the merged firms on corporate performance (Breen, 1987).…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Mergers, taxation and accounting performance: Some evidence from Greece

Pazarskis¹,

Drogalas²,

Koutoupis³

2017

J. Account. Taxation

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The study examines the merger effects on the accounting performance of Greek firms, in parallel with their taxation impact, during the period of economic crisis in Greece. The study analyses twelve accounting measures from financial statements and financial ratios of a sample of Greek listed firms in the Athens Exchange that carried out one merger in the period from 2010 to 2015 as acquirers. The results revealed that none of the twelve examined accounting measures have changed significantly due to the merger event, one year after the merger transaction. Different results are proposed regarding the impact of the type of industry, as the findings of the study indicate a better accounting performance for the constructions firms than the others from our sample. Furthermore, the study investigates the impact of the new Greek Income Tax Code (GITC) (Law 4172/2013) that refers to the corporate restructuring in Greece. There is evidence that there is some effect from the new GITC and it provides further opportunities for capital gains, not subject to tax from mergers, during the period of the economic crisis in Greece.

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Section: Literature Reviewsupporting

confidence: 87%