Abstract The article presents a comment on the research paper by Susan L. Porter, which analyses the effect of alternative state tax regimes of firms' accounting and financing decisions. According to the author while the paper makes an important contribution to the literature by addressing an interesting question in a unique research setting, there are limitations associated with the empirical tests that make it difficult to interpret the results. The author discusses the empirical tests and elaborate on some of these potential limitations. He also provides some general suggestions for future research that examines variations across tax regimes. He believes that differences in taxation systems provide a fruitful area for tax researchers to investigate questions with interesting policy implications. Nevertheless, there are challenges related to multijurisdictional tax research, including the need to devise empirical tests that are sufficiently strong to detect an effect and the need to adequately control for omitted correlated variables.
Kaye J. Newberry (Wed,) studied this question.