Using a regression discontinuity design, I find that firms reduce disclosure following covenant violations.
We provide new evidence for the real effect of creditor governance following covenant violations on corporate tax policy.
Put differently, after shareholders delegate monitoring to banks following covenant violations, the marginal impact of creditor governance in lowering agency cost and boosting tax efficiency is bigger among firms that were under scant monitoring from their equity holders.
Importantly, firms' heterogeneous responses in tax planning following covenant violations suggest that banks' incentive to influence borrowers' tax avoidance behavior is not merely to preserve cash and protect their stake in a violating firm.
After all, Uber, Texas Instruments, Intel, Wells Fargo and Samsung have all fired top leaders following ethical violations or serious corporate malfeasance.
He inherited his coal business from his father, and has faced million dollar settlements and fines following regulatory violations.
In the latest investigation, the following additional violations were discovered : Workers are made to fill in documents confirming they participated in safety training, despite not actually receiving any.
Paul Beckett, the Journal's Washington bureau chief, notified staff Wednesday afternoon that Solomon was fired following ethical violations, but did not go into great detail, according to sources.
Indeed, ISIS had managed to impose itself in Iraq following Iranian violations in that country, where Shiites monopolized power and excluded Sunnis.
Similarly, human imaging studies have shown that dorsal ACC is activated following expectancy violations, whereas ventral ACC is more active during social feedback and memory retrieval (Mitchell et al., 2004; Somerville et al., 2006).
