Simone Traini

About me

I am an Associate Professor of Accounting at NHH Norwegian School of Economics, where I teach Financial Statement Analysis to Master's and EMBA students.My research focuses on the intersection of financial reporting and corporate taxation. In particular, I study how firms and corporate stakeholders—such as investors, suppliers, and employees—use financial and tax information and respond to corporate tax policies. I examine both real economic effects and stock market implications within this domain.

Contact Information

simone.traini@nhh.no

Profile Pages

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Research articles

Designing Net Wealth Taxes: Challenges in Valuing Shares in Unlisted Companieswith Henrik Skar, Peter Koerver Schmidt, and Erlend SolheimWorld Tax Journal (2025) 17(3): 1-42

Selected for the Oxford University Centre for Business Taxation Working Paper Series

This article investigates challenges of valuing unlisted shares for wealth tax purposes in light of the legal principle of equality. Using a dataset of Norwegian companies sold between 2018 and 2021, we assess the accuracy of valuation methods used in Norway, Denmark, and Switzerland by comparing estimated values with sales prices. None of the methods reliably reflect market values, though their shortcomings differ. The Norwegian method, based solely on net asset value, leads to widespread undervaluation. The Danish and Swiss methods attempt to capture goodwill by incorporating historical earnings, resulting in fewer undervaluations but more overvaluation. In countries with constitutional equality principles, such disparities may pose challenges if a wealth tax is introduced. While the Norwegian method may be more defensible in some respects, its failure to account for goodwill remains a key weakness. We consider whether a refined version of the Danish model—with certain adjustments—could offer a more balanced alternative, while acknowledging administrative complexity. Ultimately, our findings underscore the need to address valuation issues if a wealth tax—especially a global one—is to be legally defensible.

Aggressive Tax Planning and Labor Investmentswith Nathan Goldman and Christina LewellenJournal of Accounting, Auditing & Finance (2024) 39(3): 697-725

We examine the association between aggressive tax planning and labor investment efficiency. Labor is an important input to production that is material to many firms, and prior research suggests that inefficient labor investments can negatively affect future profitability and growth. We provide evidence that firms engaging in aggressive tax planning are associated with deviations from expected labor investments, which is indicative of labor investment inefficiency. We find that our results are concentrated in labor underinvestment, consistent with risks and uncertainties from aggressive tax planning making firms more cautious when investing. Our findings are stronger among firms with greater tax risk, higher labor costs, and weaker corporate governance. Our study contributes to the literature examining tax planning consequences by providing evidence that a tradeoff exists between aggressive tax planning and investments in labor. Therefore, our results suggest that managers should carefully consider the cash flow benefits of tax planning in conjunction with the potential effects of lower labor investments to ensure that the overall long-term effect of the tax strategy is value-increasing.

The Value of Dissent: Market Reaction to Voting Intention Disclosureswith Tzu-Ting Chiu, Xi Li, and Rusha Nandy

This study examines the stock market reaction to voting intentions publicly disclosed by Norges Bank Investment Management (NBIM), the asset manager of the world’s largest sovereign wealth fund, ahead of its portfolio firms’ annual general meetings (AGMs). We categorize NBIM’s voting intention as “dissent” when it disagrees with the management’s vote recommendation for a proxy proposal at an upcoming AGM. We focus on proposals where NBIM’s votes are most likely to influence outcomes—those that pass or fail by narrow margins. We find positive abnormal returns around the announcements of NBIM’s dissent voting intentions, especially for portfolio firms with weaker corporate governance, larger NBIM ownership stakes, or proposals related to capital structure and board independence. These findings suggest that investors perceive dissent votes from an influential institutional shareholder as value-enhancing, particularly in situations where external monitoring is considered valuable. This study contributes to the ongoing discussion on enhancing transparency in institutional investors’ voting practices.

Customer Tax Uncertainty and Supplier Investmentwith Tzu-Ting Chiu, Darci Fischer, and Petro Lisowsky

This study examines the link between customer firms’ tax uncertainty and their supplier firms’ investment decisions. We find that customers’ tax uncertainty, proxied by current-year additions to the reserve for unrecognized tax benefits, is associated with an increased likelihood of underinvestment and a decreased likelihood of overinvestment by suppliers. Our underinvestment results in particular are more pronounced when suppliers (1) are more exposed to customers with greater credit risk and financial constraints, lower cash flows, and higher trade credit, and (2) have a higher share of total sales from their top customers, lower inventory turnover, and membership in the durable goods industries. These results are consistent with tax uncertainty exacerbating the holdup problem—suppliers underinvest in relationship-specific assets when they are concerned about risks associated with their customers’ tax uncertainty. Overall, our study provides evidence on the importance of tax uncertainty spillovers to key external stakeholders of the firm—suppliers.

Blockchain, Financial Reporting Quality, and Investment Efficiencywith Tzu-Ting Chiu, Jee-Hae Lim, and Ju-Chun Yen

This study examines the relation between blockchain adoption and investment efficiency. Using a difference-in-differences approach with a matched sample of firms that disclosed blockchain adoption in 8-K filings between 2014 and 2023, we find that adopters exhibit higher investment efficiency after adoption compared to non-adopters. We also find that blockchain adoption is positively associated with financial reporting quality, suggesting that enhanced financial reporting quality might be a mechanism through which blockchain adoption improves investment efficiency. Further analyses show that the effect of blockchain adoption on investment efficiency varies with firms’ information environments and across types of blockchain applications. The effect is most pronounced among firms with weak information environments and those adopting non-cryptocurrency applications, where blockchain’s potential to improve investment efficiency is expected to be greater. Overall, our findings provide insights into how blockchain technology can influence financial reporting practices and corporate investment decisions.

Foreign Institutional Investors and Information Asymmetry: Evidence from Corporate Taxeswith April Klein and Georgios Voulgaris

We use firms’ tax policies as a setting to identify a mechanism through which foreign institutional investors decrease their informational disadvantage compared to domestic investors. Using a comprehensive sample of international publicly listed firms, and theoretically motivated by the equity home bias puzzle, we find that foreign investors decrease information asymmetry by influencing their portfolio firms to adjust their effective tax rates, upwards or downwards, consistent with the average tax position of their country and industry peers. We also find that this effect of foreign investors is less pronounced in corporate environments with lower information asymmetries, where the advantages to constraining management’s tax planning strategies are fewer. We address endogeneity concerns by exploiting multiple sources of exogenous variation in foreign institutional ownership. Our results provide a partial solution to the equity home bias puzzle and highlight the importance of transparency for firms’ tax policies.

Do Index Investors Impact Investee Firms' Disclosure Aggregation?with Linda Myers and Georgios Voulgaris

We investigate whether “passive” index-tracking institutional investors (index investors) impact the aggregation of their investee firms’ geographic disclosures. We find that when index investors own more of their stock, U.S. multinationals tend to reduce transparency about foreign operations by aggregating the geographic disclosures in their financial statement footnotes. However, this aggregation is less pronounced for firms facing higher information asymmetry related to corporate tax planning, organizational complexity, and low-quality accounting practices, as well as for firms owned by index investors with greater monitoring resources. Our inferences are robust to tests that address endogeneity concerns by exploiting the Russell index reconstitution as a source of exogenous variation in index investor stockholdings. Overall, our findings suggest that index investors influence investee firms’ disclosure aggregation and that their demand for informational transparency is nuanced.

Tax Haven Data Leaks and Reputation Repairwith Katarzyna Bilicka

Winner of the 2024 Bureau van Dijk prize for best paper in corporate finance at the Australasian Finance and Banking Conference

We examine whether the public revelation of sensitive tax information prompts exposed firms to adopt reputation repair policies targeting shareholders. Between April 2013 and October 2021, the International Consortium of Investigative Journalists (ICIJ) released leaked information for more than 800,000 offshore entities incorporated in tax havens, shedding light on their systematic use by multinational firms to avoid taxes. Leveraging this setting, we investigate whether firms involved in the leaks improve their governance, increase investor remuneration, and reorganize their activities to restore shareholder trust relative to unaffected firms. Consistent with reputation repair policies, we find that following the leaks, firms appoint more directors, especially those in operations, audit, and finance and accounting functions, pay higher dividends, and reduce their presence in tax havens. We find no change in effective tax rates in the post-leak period, suggesting that firms’ reorganizational efforts do not lead to a higher tax burden. Our results indicate that while data leaks significantly alter the cost-benefit trade-off of tax strategies, their net impact is beneficial to shareholders.

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