Dissertations, Theses, and Capstone Projects

Date of Degree


Document Type


Degree Name





Timothy Goodspeed

Committee Members

Armen Hovakimian

Punit Arora

Subject Categories

Accounting | Business Administration, Management, and Operations | Business Analytics | Corporate Finance | Finance | Finance and Financial Management | Public Economics | Taxation


Tax, Corporate Finance, Corporate Governance, Regional Imbalance, Convergence


This dissertation consists of three chapters that cover topics on tax impacts on corporate finance, regional disparity and corporate governance.

Chapter 1 - How Do Net Operating Loss Carryforwards Affect Tax Impact on Corporate Capital Structure? This paper examines the impact of net operating loss (NOL) carryforwards on the tax implications of corporate capital structure. Leveraging the Tax Cuts and Jobs Act of 2017 (TCJA), the largest tax reform in four decades, this paper investigates the effect of NOL carryforwards on firms' sensitivity to tax reforms. As NOL carryforwards have become increasingly significant since 2000, but not widely researched due to Compustat NOL data quality issues, this study employs a cross-sectional and longitudinal approach using difference-in-differences, triple difference, PSM, and logit models. To enhance the accuracy of estimates, this paper uses simulated marginal tax rates (SMTR) instead of the commonly used effective tax rates to reduce endogeneity. Furthermore, the research improves on previous studies by employing improved NOL data to address the limitations of Compustat data. The findings reveal that NOL carryforwards do indeed impact firms' sensitivity to tax reforms and the taxation effect on capital structure. Firms with zero or small NOL carryforwards responded to the TCJA by reducing their leverages significantly more than firms with large NOL carryforwards. Additionally, the tax exhaustion effect of NOL carryforwards reduces firms' preference for debt financing. The study also quantifies NOL's various effects, indicating that NOL's tax exhaustion effect dominates its substitution effect for interest deduction and nondebt tax shield depreciation's replacement. Ultimately, this research contributes to the growing literature on NOL carryforwards' implications and provides insights for policymakers and practitioners.

Chapter 2 - US State Tax Heterogeneity and Regional Disparity: Evidence from US State Tax Burden Convergence Analysis 1978-2022. This paper examines the US state tax burden and regional disparity convergence. Rather than relying on commonly-used macro tax measures such as tax collections over GDP, this study employs a novel tax measure that reflects the actual tax burden borne by state individual residents and corporate residents. The findings reveal that while the 1986 tax reform does not change the long-run convergent trend, the 2017 Trump tax reform is coincident with a divergence of tax burdens potentially attributable to the new cap of SALT. Besides, a club convergence analysis is conducted, and the main results show that overall convergence in the nation and three converging clusters are convergent. However, when further employing the updated time series stochastic convergence and time series beta convergence methodology to examine each state individually, the result indicates that only 8 states, or roughly 16% of the country, are converging to the national average level after shocks. This finding is in contrast to the 49 states from the club convergence, supporting the view that a substantial portion of the nation is likely diverging in tax burden.

Chapter 3 - A Review of Tax and Corporate Governance. Tax and corporate governance are interrelated and they have caught increasing attention. Though several previous pieces of literature have surveyed tax review and corporate governance review separately, based on my knowledge, very few surveys or reviews have focused solely on the relationship between tax and corporate governance. This paper particularly surveys research focused on the connection between tax and governance, and mainly present in the following areas: 1) the theory and model of tax and corporate governance relationship; 2) various measures of tax avoidance, tax aggressiveness, tax sheltering and managerial opportunism and managerial malfeasance; 3) different attributes of corporate governance and their impacts on tax planning strategies. In addition, I present possible directions and areas for future research.