Sharon P. Katz
There are 3 articles for this faculty member.
The Impact of Private Equity Ownership on Portfolio Firms' Corporate Tax Planning
| Authors: | Brad Badertscher, Sharon P. Katz, and Sonja Olhoft Rego |
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| Published: | August 28, 2009 |
| Paper Release Date: | July 2009, revised March 2010 |
| Feature: | Working Papers |
Although private firms are important components of the U.S. economy, their tax practices remains largely unknown due to the lack of publicly available financial information. In recent years, private equity (PE) firms have been broadly criticized based on the substantial tax benefits enjoyed by their owners and managers. Editorials have inflamed public opinion by accusing PE firm owners and managers as having excessively low tax rates, and pointing out that the substantial wealth generated by PE firms can "pay for sophisticated tax planning," including the use of offshore investment companies based in tax havens. More generally, critics contend that PE firms aggressively manage their tax liabilities and those of their portfolio companies. This study investigates the latter contention. In particular, the authors look at whether private companies that are majority-owned by PE firms ("majority PE-backed firms") engage in more tax avoidance than other publicly traded and privately held firms. This may be the first study to compare the tax practices of firms with different private ownership structures.
Earnings Quality and Ownership Structure: The Role of Private Equity Sponsors
| Author: | Sharon P. Katz |
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| Published: | April 30, 2009 |
| Paper Release Date: | March 2009 |
| Feature: | Working Papers |
Although 99 percent of the companies operating in the United States are private, according to the American Institute of Certified Public Accountants, their accounting practices remain largely unknown due mainly to the lack of publicly available financial statements. In this study, HBS professor Sharon P. Katz used a unique database of firms with privately held equity and publicly held debt to examine how two different ownership structures-private equity sponsorship and non-private equity sponsorship-affect firms' financial reporting practices, financial performance, and stock returns in the years preceding and following the initial public offering (IPO).
Does Public Ownership of Equity Improve Earnings Quality?
| Authors: | Dan Givoly, Carla Hayn, and Sharon P. Katz |
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| Published: | April 23, 2009 |
| Paper Release Date: | March 2009 |
| Feature: | Working Papers |
The quality of accounting information is influenced by an array of factors, most of which stem from the demand for such information for use in contractual arrangements and from the incentives and opportunities of management to manage the reported numbers. Both the demand for quality accounting information for contractual purposes and management incentives to adjust the reported earnings are likely to be influenced by whether the equity of the company is privately held or publicly traded. This study examines the differential earnings quality of private equity and public equity firms in order to shed light on how public ownership of equity affects the quality of firms' earnings. The research highlights how the presence of public equity investors affects management's reporting behavior.
