Do Natural Disasters Affect Corporate Tax Avoidance? The Case of Drought

Title: Do Natural Disasters Affect Corporate Tax Avoidance? The Case of Drought
Creator: Adrian, Christofer; Garg, Mukesh; Pham, Anh Viet; Phang, Soon-Yeow; Truong, Cameron
Relation: Journal of Business Ethics Vol. 186, Issue 1, p. 105-135
Publisher Link: http://dx.doi.org/10.1007/s10551-022-05250-7
Publisher: Springer
Resource Type: journal article
Date: 2023
Description: Natural disaster events such as drought affect the broader economy and inflict adverse consequences for firms because of spill-over effects in an integrated economy. Contrary to the expectation that firms would engage in higher levels of corporate tax avoidance strategies when they experience a negative cash flow shock, we document consistent evidence that firms engage in less corporate tax avoidance when their headquarter states experience drought. Reduced tax avoidance is more pronounced among firms with higher CSR performance and among firms operating in states that experience a GDP decline. Collectively, the findings of our study demonstrate prosocial and ethical behavior of U.S. firms when they experience natural disaster events.
Subject: climate change; corporate social responsibility; drought; ethics; tax avoidance; SDG 11; SDG 13; SDG 17; Sustainable Development Goals
Identifier: http://hdl.handle.net/1959.13/1494915
Identifier: uon:53923
Identifier: ISSN:0167-4544
Language: eng
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