Chan, Koon HungKoon HungChanHe, M.Mo, P. L. L.Zhang, W.2025-02-272025-02-272024https://repository.sfu.edu.hk/handle/sfu/4538This study examines the relationship between corporate acquirers’ long-term tax strategy (i.e., past behavior) and their subsequent choice of an acquisition payment method (i.e., future behavior) based on a book-tax tradeoff analysis. We find that acquirers with a high (low) level of long-term tax avoidance are more likely to have cash (stock)-financed acquisitions. Political influence attenuates the significance of the above relationship. Among the acquirers who use cash-financed payment method, those who are less tax aggressive tend to include debt to finance their acquisitions, suggesting that debt and non-debt tax shields are substitutes for each other in acquisitions.enjournal article10.1016/j.jcae.2024.100442