%0 Journal Article
%J Accounting and Finance
%D 2023
%T Corporate Reputation and Hedging Activities
%A Deng,Junfang
%A Yang,Jimmy
%K Accounting
%K Finance
%B Accounting and Finance
%V 63
%P 1223-1247
%8 2023
%G eng
%N S1
%2 a
%4 220996175872
%$ 220996175872

%0 Journal Article
%J Journal of Accounting and Public Policy
%D 2021
%T Income Shifting and U.S. International Trade in Goods Statistics
%A Deng,Junfang
%A Laux,Rick C
%K Accounting
%X Intrafirm trade represents greater than one-third of total U.S. international trade in goods. Since these are not arm’s-length transactions, trade policymakers have voiced concerns that income shifting may distort international trade in goods statistics through the manipulation of transfer prices. Using country-level data on intrafirm exports and imports, we estimate a path analysis that simultaneously tests how and to what extent tax-motivated transfer pricing and real investment decisions affect intrafirm trade in goods statistics. Contrary to speculation, we do not find an economically significant relation between transfer pricing and intrafirm trade in goods statistics. In contrast, we find that tax-motivated location decisions create a 21 (20) percent or $819.7 ($927.1) million difference in mean intrafirm exports (imports) between the U.S. and a low- and high-tax country. This study provides trade policymakers with relevant information about the extent to which real investment decisions and accounting manipulations affect intrafirm trade in goods statistics and contributes to the international trade and income shifting literatures.
%B Journal of Accounting and Public Policy
%V 40
%8 2021
%G eng
%N 5
%2 a
%4 193433554944
%$ 193433554944

%0 Journal Article
%J Journal of the American Taxation Association
%D 2021
%T Proprietary Costs and the Reporting of Segment-level Tax Expense
%A Deng,Junfang
%A Steele,Logan
%A Lynch,Dan
%A Gaertner,Fabio B
%K Accounting
%X We examine whether proprietary costs of disclosure affect the reporting of segment-level tax expense. Current accounting rules for segment-level reporting afford managers significant discretion in what line items to report. We predict and find firms with higher proprietary costs of disclosure (i.e., higher tax avoidance) are less likely to disclose segment-level tax information. These results are stronger for firms that define business segments on a geographic basis, where disclosure could reveal tax expense information about specific tax jurisdictions, consistent with the proprietary cost hypothesis. Overall, our results suggest some managers potentially use discretion in current guidance to avoid segment-level disclosure of taxes when these disclosures have the potential to be detrimental to the firm.
%B Journal of the American Taxation Association
%V 43
%P 1-26
%8 2021
%G eng
%U https://doi.org/10.2308/JATA-19-002
%N 1
%2 a
%4 202589071360
%$ 202589071360

%0 Journal Article
%J Journal of Accounting Research
%D 2020
%T Foreign Exchange Risk, Hedging, and Tax-Motivated Outbound Income Shifting
%A Deng,Junfang
%K Accounting
%X Although outbound income shifting to low‐tax jurisdictions provides tax savings, it is often accompanied by nontax costs. In this study, I examine whether foreign exchange (FX) risk constrains tax‐motivated outbound income shifting by U.S. multinational corporations. My findings indicate that exposure to greater currency volatility is associated with less outbound income shifting, and this effect is stronger for firms with foreign affiliates using foreign functional currencies. I also investigate whether hedging facilitates outbound income shifting. Consistent with hedging lowering costs associated with exchange rate volatility, I find that U.S. firms that use more currency derivatives tend to shift more income to low‐tax foreign jurisdictions. Overall, these findings suggest that FX risk is an important cost of outbound income shifting.
%B Journal of Accounting Research
%V 58
%P 953-987
%8 2020
%G eng
%U https://onlinelibrary.wiley.com/doi/10.1111/1475-679X.12326
%N 4
%2 a
%4 193433618432
%$ 193433618432