Jake Smith, 
PhD Candidate

Naveen Jindal School of Management | Finance
University of Texas at Dallas

I'm a Finance PhD candidate at the University of Texas at Dallas. My research focuses on empirical corporate finance.

I received a Bachelor of Science in Finance summa cum laude from the University of South Florida Sarasota-Manatee in 2013, and was awarded the distinction of Outstanding Senior in Finance. I then received a Master of Science in Finance from the University of South Florida in 2015.

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CV | Email | Google Scholar | SSRN

Tax Avoidance through Cross-Border Mergers and Acquisitions

with Jean-Marie Meier

Abstract

While tax havens are known as custodians and intermediaries of assets, this is the first paper to document that havens affect the ownership of assets on a large scale. We investigate cross-border, tax-haven mergers and acquisitions (M&A) using hand-collected data on tax residence laws and a novel algorithm that derives the tax residence of any company. Tax havens have $2.4 trillion in M&A deal value beyond what is predicted based on economic fundamentals. Cross-border, tax-haven M&A results in $29.7 billion in tax avoidance annually, and cross-border, non-haven M&A results in an additional $34.0 billion in annual tax avoidance.

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Conference Presentations

• 7th IWH-FIN-FIRE Workshop on "Challenges to Financial Stability," (scheduled)

• China International Conference in Finance 2021, Shanghai

• SFS Cavalcade 2021, online

• Midwest Finance Association 2021, online

• Journal of Law, Finance, and Accounting 2020, online

• European Economic Association 2020, online

• 10th EIASM Conference on Current Research in Taxation, online

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Poster Session

• American Economic Association 2021 Conference, online

The COVID-19 Bailouts

with Jean-Marie Meier

Published as a pre-print in Covid Economics, Issue 83, 2 July 2021.

Abstract

We use hand-collected data to investigate the COVID-19 bailouts for all publicly listed US firms. The median tax rate is 4% for bailout firms and 16% for no-bailout firms. The bailouts are expensive when compared to past corporate income tax payments of the bailout firms. We compute the number of years a bailout recipient has to pay corporate income tax to generate as much tax revenue as it received in bailouts: 135.0 years for the Paycheck Protection Program and 267.9 years for the airline bailouts. We also document a dark side of the bailouts. For many firms, the bailouts appear to be a windfall. Numerous bailout recipients made risky financial decisions, so bailing them out might induce moral hazard. Moreover, lobbying expenditures positively predict the bailout likelihood and amount.