TY - UNPD A1 - Alexander, Anna A1 - Jacob, Martin T1 - Executive inside debt and corporate tax avoidance N2 - This study examines the relation between executives’ inside debt holdings and corporate tax risk. As executives’ inside debt holdings are unsecured and unfunded, they should align executives’ interests with those of outside debtholders and incentivize executives to act more conservatively toward risk. Hence, inside debt should also reduce the risk of tax avoidance activities. Consistent with this prediction, we find that executive inside debt holdings are negatively related to tax risk. Further, this relation becomes stronger at higher levels of tax risk. We also find that the relation between insider debt and tax risk is stronger for firms that are not facing liquidity constraints and among well-governed firms. The latter result implies that institutional ownership and inside debt compensation are substitutes in reducing tax risk. Overall, our results suggest that part of the observed cross-sectional difference in tax avoidance can be explained by a reduction in tax risk that is related to executive inside debt holdings. KW - Steuerrisiko KW - Tax risk KW - Managementvergütung KW - Executive compensation KW - Corporate Governance KW - Corporate governance Y1 - 2018 UR - https://opus4.kobv.de/opus4-whu/frontdoor/index/index/docId/648 UR - https://nbn-resolving.org/urn:nbn:de:hbz:992-opus4-6486 PB - WHU - Otto Beisheim School of Management CY - Vallendar ER -