Corporate tax avoidance and narrative disclosure tone: a developing country perspective

Arshad Hasan, Waqas Anwar, Joseph H. Zhang and Ana Marques

Meditari Accountancy Research, 2024, vol. 33, issue 1, 114-143

Abstract: Purpose - This study aims to examine the link between tax avoidance, corporate governance and narrative disclosure tone using a sample of public companies in Pakistan. Design/methodology/approach - Data for 125 companies listed on the Pakistan Stock Exchange (PSX) are collected over 10 years from 2011 to 2020. Sentiment analysis is conducted to determine the disclosure tone, and regression analysis is used to test the association between the variables. Findings - This paper finds that firms that engage in tax avoidance tend to use a more positive disclosure tone and are more likely to engage in impression management. Moreover, promoting sound governance through board independence and gender diversity is associated with a less positive disclosure tone. However, firms with more family board members and higher foreign ownership are more likely to use a more positive disclosure tone. Practical implications - Regulators can use this information to develop better guidelines to protect investors and ensure faithful disclosures to address both positive and negative news. Originality/value - The study contributes to the literature by examining corporate tax avoidance as a determinant of narrative disclosure tone, a relationship that has not been widely explored. Moreover, as most disclosure tone research has been conducted in developed countries, this paper provides valuable evidence from a developing country.

Keywords: Narrative disclosure tone; Tax avoidance; Corporate governance; Board characteristics; Ownership structure; Pakistan (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
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:eme:medarp:medar-01-2024-2314

DOI: 10.1108/MEDAR-01-2024-2314

Access Statistics for this article

Meditari Accountancy Research is currently edited by Prof Charl de Villiers and Warren Maroun

More articles in Meditari Accountancy Research from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().