Climate Change, Tax Avoidance, and Shareholder Value: Evidence from the Paris Agreement

14 Pages Posted: 9 Sep 2023

See all articles by Sang Mook Lee

Sang Mook Lee

Pennsylvania State University - Great Valley School of Graduate Professional Studies

Pattanaporn Chatjuthamard

Sasin GIBA

Pandej Chintrakarn

Mahidol University International College (MUIC)

Pornsit Jiraporn

Pennsylvania State University - School of Graduate Professional Studies (SGPS)

Abstract

Motivated by the rapidly emerging literature on climate change and finance, we explore the effect of corporate tax avoidance on shareholder value around the adoption of the Paris climate agreement. Companies engaging in greater tax avoidance experience significantly more favorable stock market reactions. Companies that achieve greater savings through tax avoidance have a larger surplus of resources that can be directed towards climate-related actions in alignment with the Paris Agreement, resulting in enhanced shareholder value. Furthermore, the advantageous impact of tax avoidance on shareholder wealth is significantly less pronounced for companies that pay out larger dividends.

Keywords: : climate change, tax avoidance, Paris Agreement, event study, stock market reactions, tax aggressiveness

Suggested Citation

Lee, Sang Mook and Chatjuthamard, Pattanaporn and Chintrakarn, Pandej and Jiraporn, Pornsit, Climate Change, Tax Avoidance, and Shareholder Value: Evidence from the Paris Agreement. Available at SSRN: https://ssrn.com/abstract=4566545 or http://dx.doi.org/10.2139/ssrn.4566545

Sang Mook Lee (Contact Author)

Pennsylvania State University - Great Valley School of Graduate Professional Studies ( email )

30 E. Swedesford Road
Malvern, PA 19355
United States
610-725-5391 (Phone)

Pattanaporn Chatjuthamard

Sasin GIBA ( email )

Bangkok
Thailand

Pandej Chintrakarn

Mahidol University International College (MUIC) ( email )

999 Buddhamonthon 4 Road
Salaya, Nakhonpathom, 73170
Thailand

Pornsit Jiraporn

Pennsylvania State University - School of Graduate Professional Studies (SGPS) ( email )

30 E. Swedesford Road
Malvern, PA 19355
United States
(484) 753-3655 (Phone)

HOME PAGE: http://www.personal.psu.edu/pxj11/index1.html

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