This paper examines introducing Economic Value Added as a performance measure for small manufacturing companies. Advantages and disadvantages of using Economic Value Added as a primary measure of performance as compared to sales, revenues, earnings, operating profit, profit after tax, and profit margin are investigated. The Economic Value Added calculation using data from a small company’s inco...

This paper examines the evolution of the corporate profit base and the relationship between book income and tax income for U.S. corporations over last two decades. The paper demonstrates that this relationship has broken down over the 1990s and has broken down in a manner that is consistent with increased sheltering activity. The paper traces the growing discrepancy between book and tax income ...

This study examines private companies’ tax aggressiveness and its changes in response to interventions by the government administration. While scholars have researched authorities’ extensively, this is first consider “light” technique of adjustments made administration immediately after firm submits return. We utilized a large-scale proprietary dataset obtained from Finland’s (covering 85,155 f...

Taking advantage of lower foreign tax rates using transfer pricing and taking advantage of lower production costs using offshoring are two strategies that global companies use to increase their profitability. Evidence suggests that firms employ these strategies independently. We study how global firms can jointly leverage tax and cost differences through coordinated transfer pricing and offshor...

Three factors significantly influence profit repatriations by U.S. multinational firms: tax considerations, domestic financing and investment needs, and agency problems inside firms. Dividend repatriations are surprisingly persistent and resemble dividend payments to external shareholders. Tax considerations are influential but not decisive. Affiliates whose organizational forms carry differing...

Using an arbitrage approach, Black (1980) and Tepper (1981) conclude that the optimal corporate pension policy is for companies to fully fund their pension plans, borrowing on corporate account if necessary, and investing the pension fund entirely in taxable bonds. The implications of the Black-Tepper arbitrage results for optimal asset location for individual investors were first discussed in ...

Every year, companies that produce commercial tax preparation software struggle with thousands of state and federal changes to tax laws and forms. Three competitors dominate the market with its short selling season, and release delays slash profits. Tax authorities issue updates August-December, and all changes must be processed and incorporated before year end. Systematic resource allocation a...