Is Corporate Tax Aggressiveness a Reputation Threat? Corporate Accountability, Corporate Social Responsibility, and Corporate Tax Behavior

Baudot, L., J. A. Johnson, A. Roberts, and R. W. Roberts. 2019. Is Corporate Tax Aggressiveness a Reputation Threat? Corporate Accountability, Corporate Social Responsibility, and Corporate Tax Behavior. Journal of Business Ethics, Doi.org/10.1007/s10551-019-04227-3

Posted: 10 Jul 2020

See all articles by Lisa Baudot

Lisa Baudot

University of Central Florida - Kenneth G. Dixon School of Accounting

Joseph Johnson

University of Central Florida

Robin W. Roberts

University of Central Florida - Kenneth G. Dixon School of Accounting

Date Written: June 25, 2019

Abstract

In this paper, we consider the relationships among corporate accountability, reputation, and tax behavior as a corporate social responsibility issue. As part of our investigation, we provide empirical examples of corporate reputation and corporate tax behaviors using a sample of large, U.S.-based multinational companies. In addition, we utilize corporate tax controversies to illustrate possibilities for aggressive corporate tax behaviors of high-profile multinationals to become a reputation threat. Finally, we consider whether reputation serves as an accountability mechanism for corporate tax behaviors among other mechanisms for holding firms accountable for corporate tax behaviors. Our conceptual work points to a complicated relationship among shareholder, stakeholder, and civic responsibilities in the development and execution of firm’s corporate tax strategies. Building on those insights, our empirical illustration considers corporate reputation data alongside data which reflects corporate tax behavior. Based on this work, we find no clear trend or pattern indicating that reputation is associated with or affected by certain types of corporate tax behaviors. That is, our exploratory empirical illustration suggests that corporate tax behavior does not produce broad reputational consequences that would motivate a change in firm behavior. Drawing from celebrity and strategic silence research, we then suggest that reputation may not be a well-functioning mechanism for holding corporations to account for contributing their fair share of the resources used by government for the benefit of society and offer-related theoretical insights.

Keywords: Corporate accountability, Corporate tax behavior, Corporate reputation

Suggested Citation

Baudot, Lisa and Johnson, Joseph and Roberts, Robin W., Is Corporate Tax Aggressiveness a Reputation Threat? Corporate Accountability, Corporate Social Responsibility, and Corporate Tax Behavior (June 25, 2019). Baudot, L., J. A. Johnson, A. Roberts, and R. W. Roberts. 2019. Is Corporate Tax Aggressiveness a Reputation Threat? Corporate Accountability, Corporate Social Responsibility, and Corporate Tax Behavior. Journal of Business Ethics, Doi.org/10.1007/s10551-019-04227-3, Available at SSRN: https://ssrn.com/abstract=3409894

Lisa Baudot

University of Central Florida - Kenneth G. Dixon School of Accounting ( email )

University of Central Florida
P.O. Box 161400
Orlando, FL 32816-1400
United States

Joseph Johnson

University of Central Florida ( email )

12744 Pegasus Dr.
Orlando, FL 32816
United States

Robin W. Roberts (Contact Author)

University of Central Florida - Kenneth G. Dixon School of Accounting ( email )

University of Central Florida
P.O. Box 161400
Orlando, FL 32816-1400
United States
407-823-2871 (Phone)
407-823-3881 (Fax)

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