This study empirically analyzes the impact of corporate tax strategies on stock price synchronicity by expanding the research flow of capital markets. Stock price synchronicity means how similar individual stock returns and market returns move. According to a prior study, the more information specific to the company is reflected in the stock price, the less the company’s stock price is affected by the market, and the less it is stock price synchronicity is.

The first purpose of this study is to explore the impact of tax strategies on stock price synchronicity. It was expected that stock price synchronization would decrease if the company’s unique characteristics of an aggressive tax strategy were more reflected in the stock price. The second purpose of this study is to see if the phenomenon of tax avoidance affecting stock price synchronicity depends on tax avoidance characteristics. Suppose an entity’s tax strategy is maintained continuously and consistently. In that case, it is expected that stock price synchronization will deepen because it will lose value as a piece of entity-specific information and become a universal and general source of information rather than as an aggressive tax strategy carried out on an available basis at a given time.

According to the empirical test, aggressive tax strategies act like a characteristic of the company, and the higher the level of tax avoidance, the less the stock price synchronicity phenomenon. On the other hand, if tax avoidance consistency is high, even aggressive tax avoidance increases stock price synchronicity.

This study is different from the existing prior study, which focused on one of the two-sided tax avoidance characteristics. It is meaningful that the level of tax avoidance itself is considered one of the characteristics unique to the company and that it has verified whether stock price synchronicity is differentiated depending on the level. Also, the discovery that tax avoidance’s sustainability has a discriminatory effect on stock price synchronicity is expected to provide a significant opportunity for investors, users of information, and managers who determine the corporate tax strategy to broaden their view of tax avoidance.

▶ Key Words： tax strategy, tax avoidance, tax avoidance aggressiveness, tax avoidance consistency, stock price synchronicity