Journal article
An Examination of Reputational Costs and Tax Avoidance: Evidence from Firms with Valuable Consumer Brands
The Journal of the American Taxation Association, Vol.39(1), pp.67-93
03/22/2017
DOI: 10.2308/atax-51634
Abstract
We expect firms with the greatest exposure to reputational damage among consumers will engage in lower levels of tax avoidance to minimize unwanted scrutiny that could impair the firms' reputation. We identify a set of firms with valuable consumer reputation using Harris Interactive's EquiTrend survey, which surveys consumers about their perceptions of valuable and prominent brands. We find evidence in support of our hypothesis that firms with valuable brands will engage in less tax avoidance. Specifically, we find a positive and significant association between our measure of reputation and both the GAAP and cash effective tax rates (measured over one and three years). We find mixed evidence on whether there is a negative and significant association between reputation and the probability the firm is engaging in tax sheltering.
Details
- Title: Subtitle
- An Examination of Reputational Costs and Tax Avoidance: Evidence from Firms with Valuable Consumer Brands
- Creators
- Chelsea Rae Austin - University of South CarolinaRyan J. Wilson - University of Oregon
- Resource Type
- Journal article
- Publication Details
- The Journal of the American Taxation Association, Vol.39(1), pp.67-93
- Publisher
- Amer Accounting Assoc
- DOI
- 10.2308/atax-51634
- ISSN
- 0198-9073
- eISSN
- 1558-8017
- Number of pages
- 27
- Language
- English
- Date published
- 03/22/2017
- Academic Unit
- Accounting
- Record Identifier
- 9984380502502771
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