The determinants of LIFO layer liquidations: Tax minimization and agency cost factors.

Persistent Link:
http://hdl.handle.net/10150/185513
Title:
The determinants of LIFO layer liquidations: Tax minimization and agency cost factors.
Author:
Frankel, Micah Paul
Issue Date:
1991
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
Prior LIFO studies have assumed that a LIFO-use firm will avoid liquidating old low-cost inventory layers due to the resulting tax penalty. However, a LIFO-use firm can actually receive a tax subsidy by liquidating inventory layers in a low marginal tax year, thus avoiding the need to liquidate in future higher tax years. This leads to the prediction that low marginal tax rate LIFO firms account for the majority of LIFO liquidations. Using several measures of a firm's marginal tax rate, and controlling for other potential determinants of LIFO liquidations, this prediction receives strong empirical support. The other potential determinants controlled for which are significantly associated with liquidations include: the probability of violating debt covenants, firm specific sales, industry specific production, investment and financing factors (PIFs) and economy wide factors.
Type:
text; Dissertation-Reproduction (electronic)
Keywords:
Business administration research and education.
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Business Administration; Graduate College
Degree Grantor:
University of Arizona
Advisor:
Dhaliwal, Dan S.

Full metadata record

DC FieldValue Language
dc.language.isoenen_US
dc.titleThe determinants of LIFO layer liquidations: Tax minimization and agency cost factors.en_US
dc.creatorFrankel, Micah Paulen_US
dc.contributor.authorFrankel, Micah Paulen_US
dc.date.issued1991en_US
dc.publisherThe University of Arizona.en_US
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en_US
dc.description.abstractPrior LIFO studies have assumed that a LIFO-use firm will avoid liquidating old low-cost inventory layers due to the resulting tax penalty. However, a LIFO-use firm can actually receive a tax subsidy by liquidating inventory layers in a low marginal tax year, thus avoiding the need to liquidate in future higher tax years. This leads to the prediction that low marginal tax rate LIFO firms account for the majority of LIFO liquidations. Using several measures of a firm's marginal tax rate, and controlling for other potential determinants of LIFO liquidations, this prediction receives strong empirical support. The other potential determinants controlled for which are significantly associated with liquidations include: the probability of violating debt covenants, firm specific sales, industry specific production, investment and financing factors (PIFs) and economy wide factors.en_US
dc.typetexten_US
dc.typeDissertation-Reproduction (electronic)en_US
dc.subjectBusiness administration research and education.en_US
thesis.degree.namePh.D.en_US
thesis.degree.leveldoctoralen_US
thesis.degree.disciplineBusiness Administrationen_US
thesis.degree.disciplineGraduate Collegeen_US
thesis.degree.grantorUniversity of Arizonaen_US
dc.contributor.advisorDhaliwal, Dan S.en_US
dc.contributor.committeememberLassar, Sharonen_US
dc.contributor.committeememberWang, Shiing-wuen_US
dc.contributor.committeememberAtkins, Allen B.en_US
dc.identifier.proquest9136845en_US
dc.identifier.oclc701095452en_US
All Items in UA Campus Repository are protected by copyright, with all rights reserved, unless otherwise indicated.