Reputational Risk and Corporate Tax Planning

Raffael Speitmann

Publication: Working/Discussion PaperWU Working Paper

Abstract

Corporate tax behavior has recently received considerable public interest, and anecdotal evidence suggests that firms are increasingly concerned about the reputational risk of tax planning. Using RepRisk data to capture firms’ reputational risk due to public scrutiny, this study examines the relationship between reputational risk and corporate tax planning. If managers anticipate higher costs of tax planning in response to higher reputational risk, firms might adjust their tax behavior. My results suggest that firms initially react to more public scrutiny and report higher GAAP effective tax rates. However, this association reverses once public scrutiny decays, suggesting that firms make rather superficial changes of their tax behavior in response to public pressure.
Original languageEnglish
Place of PublicationVienna
PublisherWU Vienna University of Economics and Business
DOIs
Publication statusPublished - 2021

Publication series

NameWU International Taxation Research Paper Series
No.2021-11

WU Working Paper Series

  • WU International Taxation Research Paper Series

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