ABSTRACT This study investigates the influence of three interest groups—businesses, the tax profession, and civil society—on tax rules in the context of the Organisation for Economic Co‐operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) project. Our study is important as prior research has not examined the direct influence of various interest groups on the content of tax rules by means of comment letters. Using content analysis, we seek to explain the lobbying success of the different interest groups by examining the relevance of the kind of information transmitted and the alliance strategies used. Results indicate that lobbying success is mainly explained by the vested interests of the three groups, with businesses less successful than the other two interest groups as long as all interest groups are equally able to provide information. We also find that the lobbying success of businesses increases when proposals require specific expertise. However, bias is still relevant for lobbying success as we find that proposals from tax professionals with practical experience, likely to reflect less bias, are relatively more successful than proposals from businesses. Furthermore, our results suggest that mobilizing commenters who have a shared interest in the form of alliances is a promising lobbying strategy. Overall, our findings highlight the importance of expertise and collective actions for lobbying success.

ABSTRACT This research examines spillover effects of tax avoidance on peers' firm value using the setting of the European Commission's state aid investigations of private letter rulings. We assume that news about a firm's tax avoidance strategies also reveals information about peers' tax avoidance because investors expect similar firms to use similar strategies. Based on an event study design, we show that news about potential costs of tax avoidance of targeted U.S. multinational firms leads to negative stock price reactions among their peers. Moreover, peers' investors adjust their evaluations upward for news in favor of the targeted firms. Consistent with the level of tax avoidance being indicative of having similar strategies, spillover effects are stronger for firms with the highest levels of tax avoidance when examining a broad set of peers. Our findings suggest the need for a more comprehensive understanding of the costs and benefits of tax avoidance. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: G32; H25; H26.