| Summary: | 碩士 === 國立中央大學 === 財務金融學系 === 104 === This paper employs scale of samples of U.S firms for period 1995-2013 and discusses whether the tax avoidance of customer-firm will lead to firm-specific stock price crash risk of supplier firm. We provide the evidence that tax avoidance of customer-firm is positively associated with supply firm of firm-specific stock price crash risk. It indicates that tax avoidance of customer facilitates managerial bad news hoarding activities for extending these opportunistic behaviors. Then the bad news hoarding activities will promote the diffusion of tax avoidance from customer to supplier. When the accumulating hidden bad news of customer-firm overwhelms a tipping point, the hoarding and accumulation of bad news for extend periods lead to stock price crashes of supplier firm. However, the tax avoidance view overlooks modern corporations: the separation of ownership and control which may cause the manager and shareholder’s inconsistent interests. Managers will use financial statement to hide the bad news. When the bad news will cross a tipping point, it leads to stock price crash risk. Moreover, we displayed that the different earnings management and tax avoidance to investigate tax avoidance of the customer and supplier stock price crash risk. We also found tax avoidance of customer will result in the stock price crash risk of a supplier in different earnings management variables and tax avoidance variables through the supply chain to affect supplier’s tax avoidance.
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