The Impact of Stakeholder Orientation on Tax Avoidance: Evidence from a Natural Experiment

Authors

Gary Chen, DePaul University
Ani Manakyan Mathers, Salisbury University
Bin Wang, Marquette UniversityFollow
Xiaohong Wang, Northeastern Illinois University

Document Type

Article

Publication Date

4-2023

Publisher

Wiley

Source Publication

Journal of Corporate Accounting & Finance

Source ISSN

1044-8136

Original Item ID

10.1002/jcaf.22594

Abstract

We study the effect of stakeholder orientation on corporate tax avoidance. Using the staggered passage of constituency statutes across U.S. states between 1983 and 2006, we show that greater stakeholder orientation results in increased tax avoidance. We further find greater tax avoidance among firms with limited financial resources and that employees benefit from the change. Our results are consistent with stakeholder salience theory that resource-constrained managers prioritize the claims of salient stakeholders, such as employees, at the expense of secondary stakeholders, such as the government.

Comments

Accepted version. Journal of Corporate Accounting & Finance, Vol. 34, No. 2 (April 2023): 37-56. DOI. © 2023 Wiley. Used with permission.

Recommended Citation

Chen, Gary; Manakyan Mathers, Ani; Wang, Bin; and Wang, Xiaohong, "The Impact of Stakeholder Orientation on Tax Avoidance: Evidence from a Natural Experiment" (2023). Finance Faculty Research and Publications. 155.
https://epublications.marquette.edu/fin_fac/155