Bradley S. Blaylock

• Professor (Associate) at University of Oklahoma

Recent research provides evidence consistent with tax-motivated income shifting taking place in Big 4 networks. Non-Big 4 networks have global footprints and audit a significant proportion of private-firm clients. Thus, we cannot make sense of audit-firm networks’ tax avoidance proclivities and the impacts their tax advice may have on aggregate cli...

We examine whether repatriation tax liabilities affect bond pricing using four settings: (1) pricing on a new bond issuance, (2) pricing changes around the American Jobs Creation Act of 2004 (AJCA), (3) pricing changes around the 2016 US election, and (4) pricing changes around the Tax Cuts and Jobs Act of 2017 (TCJA). The preponderance of evidence...

Accounting research on tax has primarily focused on documenting the income shifting strategies of multinational corporations. However, no studies, as far as we are aware, have hitherto explored how large accountancy firms manage their own tax affairs despite being huge economic entities in their own right. Using a unique private firm dataset of Big...

Prior research suggests that investors behave “as if” taxable income contains information about future performance by providing evidence of a positive association between taxable income and stock returns. We draw on the fundamental analysis literature and provide direct evidence on this assertion by examining whether taxable income predicts future...

We examine the effect of increased book-tax conformity on corporate capital structure. Prior studies document a decrease in the informativeness of accounting earnings for equity markets resulting from higher book-tax conformity. We argue that the decrease in earnings informativeness impacts equity holders more than debt holders because of the diffe...

We examine the role of government in the labor-creditor relationship using the case of the Chrysler bankruptcy. As a result of the government intervention, firms in more unionized industries experienced lower event-window abnormal bond returns, higher abnormal bond yields, and lower cumulative abnormal bond returns. The results are stronger for fir...

Two influential papers in the tax avoidance literature (Desai and Dharmapala 2006 and Desai et al. 2007) argue that aggressive forms of tax avoidance employ technologies that complement managerial rent extraction, and provide supporting evidence from firms in Russia. Several papers rely on this theory to motivate and interpret tests in a U.S. setti...

We examine the effect of increased book-tax conformity on corporate capital structure. Prior studies document a decrease in the informativeness of accounting earnings for equity markets resulting from higher book-tax conformity. We argue that the decrease in earnings informativeness impacts equity holders more than debt holders because of the diffe...

The U.S. Government’s intervention in Chrysler LLC’s bankruptcy resulted in secured creditors receiving substantially less than the face value of their claims while an unsecured creditor, the UAW, received a substantial payment in exchange for their claims. We observe an increase in borrowing costs (changes in loan spreads and bond returns) for fir...

There is an ongoing debate in the literature about the costs and benefits of conforming book and taxable income in the US. Proponents argue that increased book-tax conformity will reduce aggressive financial reporting because managing earnings up increases taxes and will curtail abusive tax shelters because managing taxes down decreases earnings re...

Two influential papers in the tax avoidance literature (Desai and Dharmapala 2006 and Desai et al. 2007) argue that tax avoidance can be used to facilitate managerial rent extraction from shareholders. Even though many subsequent papers have asserted a relation between tax avoidance and rent extraction, there is little empirical evidence to support...

We investigate why temporary book-tax differences appear to serve as a useful signal of earnings persistence (Hanlon 2005). We first test and show that temporary book-tax differences provide incremental information over the magnitude of accruals for the persistence of earnings and accruals. We then opine that there are multiple potential sources of...