Wharton’s Blouin Leads Interdisciplinary Seminar; Seven New Faculty Welcomed

Thursday, September 5, 2019

On Wednesday, Sept. 4, the Kenan Institute hosted the interdisciplinary seminar, “Does Tax Planning Affect Organizational Complexity: Evidence from Check-the-Box” at the Kenan Center in Chapel Hill. Jennifer Blouin, professor of accounting at the University of Pennsylvania’s Wharton School of Business and Kenan Institute senior faculty fellow, presented research she conducted with Linda K. Krull, associate professor of accounting at the University of Oregon’s Lundquist College of Business.

Blouin and Krull’s research focuses on the effect of the 1997 Check-the-Box U.S. tax regulations on the organizational structures and current effective income tax rates of U.S. multinational firms. Blouin and Krull found that the regulations have led firms to become more organizationally complex, and that average worldwide tax rates for U.S. multinational firms post-regulations declined by 11.6%, from 33.4% to 21.8%. The data, which covered the period from 1982-2015, also showed that Check-the-Box had a much larger influence on firms’ foreign tax rate than their domestic rate. The biggest tax advantage was realized by those firms that implemented the most extensive shifts to their organizational structure.

Following Blouin’s presentation, discussant Saravanan Kesavan, associate professor and Sarah Graham Kenan Scholar at UNC Kenan-Flagler Business School, provided a brief look at the research from a supply chain perspective. Kesavan noted that, for supply chain considerations, risk is frequently defined differently than it is for tax planning. Multinational firms restructure their supply chains mostly to reduce cost structures and improve services levels, thereby maximizing profits. During restructuring planning, tax implications are rarely considered.

Kesavan said there is a need to study ways to combine tax efficiency with optimized operations when considering supply chain restructuring. Questions for further research include determining how the types of structure changes Blouin discussed (greater organizational depth and an increased number of tax havens) affect underlying business processes and supply chain risk.

The interdisciplinary seminar was followed by a reception and dinner for new Kenan-Flagler faculty. Incoming faculty provided a brief overview of their research and work interests. The following incoming UNC Kenan-Flagler Business School faculty were introduced:

  • Andra Ghent, Associate Professor of Finance
  • Kyuhong Han, Assistant Professor of Marketing
  • Minkyung Kim, Assistant Professor of Marketing
  • Fei Long, Assistant Professor of Marketing
  • Arzu Ozoguz, Clinical Associate Professor of Finance
  • Donghwa Shin, Assistant Professor of Finance
  • Longxiu Tian, Assistant Professor of Marketing

Welcome to these new Kenan-Flagler faculty!