Consumer Reactions to Tax Avoidance: Evidence from the United States and Germany

Inga Hardeck (), J. William Harden () and David R. Upton ()
Additional contact information
Inga Hardeck: University of Siegen
J. William Harden: UNC Greensboro
David R. Upton: UNC Greensboro

Journal of Business Ethics, 2021, vol. 170, issue 1, No 6, 75-96

Abstract: Abstract This research investigates the impact of corporate tax strategies (i.e., tax avoidance and non-avoidance) on consumers’ corporate social responsibility (CSR) perceptions, willingness to pay (WTP), and attitude toward the firm in two laboratory experiments (n = 409) in the United States and Germany. Using the Becker–DeGroot–Marschak incentive-compatible mechanism, which avoids a social desirability bias found in prior research, our results indicate only a minor indirect effect of corporate tax strategies on WTP by way of the mediator CSR perceptions. However, we find a strong effect on attitude toward the firm again mostly mediated by CSR perceptions. In contrast to German consumers, U.S. consumers’ CSR perceptions of tax avoidance are independent of whether a strategy is likely accepted by the tax authorities. Overall, we conclude that CSR perceptions are highly relevant when it comes to consumer responses to tax avoidance.

Keywords: BDM; Attitude toward the firm; Corporate social responsibility; Tax avoidance; Tax uncertainty; WTP (search for similar items in EconPapers)
JEL-codes: H26 M41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://link.springer.com/10.1007/s10551-019-04292-8 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jbuset:v:170:y:2021:i:1:d:10.1007_s10551-019-04292-8

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/10551/PS2

DOI: 10.1007/s10551-019-04292-8

Access Statistics for this article

Journal of Business Ethics is currently edited by Michelle Greenwood and R. Edward Freeman

More articles in Journal of Business Ethics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().