Note(s): This table reports the regression discontinuity coefficients for the bank uncertainty measures. The table reports both the local linear and quadratic regression discontinuity coefficients first by specifying a sub-sample of “All Relevant Banks,” which includes banks between $10B and $200B in total asset size, and second, by using the MSE optimal bandwidth measure. The table reports the results for the following tax risk measures: Regulatory Uncertainty, Regulatory Uncertainty sentiment and tax-related Regulatory Uncertainty, which are proxies for the standardized firm-level political risk, political risk sentiment and political tax risk, obtained from the dataset provided by Hassan et al. (2019), and the Portfolio Uncertainty, which is the uncertainty sentiment captured in the “Portfolio” risk culture driver. Regressions are triangular kernel weighted and are allowed to capture more banks in a larger bandwidth in the first two columns and are restricted to having at least 65 observations within the selected optimal bandwidth in the last two columns. Control variables include the first 12 bank characteristics shown in Table 2. All regressions include bank and year-fixed effects. Standard errors are clustered at the bank level and are reported in parentheses while observation counts are reported in brackets. ***, ** and * indicate significance at the 1%, 5% and 10% levels, respectively

Source(s): Authors’ own work