Consumer Reactions to Corporate Tax Strategies: Effects on Corporate Reputation and Purchasing Behavior

Inga Hardeck () and Rebecca Hertl ()

Journal of Business Ethics, 2014, vol. 123, issue 2, 309-326

Abstract: On the basis of an interdisciplinary approach linking taxation, marketing, and corporate social responsibility, the present research investigates the effects of media reports on aggressive and responsible corporate tax strategies (CTSs) on corporate success with consumers. By means of two laboratory experiments (N = 150, 360), we analyze the effects of the CTSs on corporate reputation, consumer purchase intention, and the consumer’s willingness to pay. Our results suggest that aggressive CTSs diminish corporate success with consumers, whereas responsible CTSs enhance it. Nevertheless, consumers are not willing to pay a price premium for products sold by responsible tax-planning companies, but rather punish aggressive tax-planning companies through a slightly lower willingness to pay. Finally, consumers’ tax morale and their attitude toward tax avoidance are important moderating variables. Given the growing level of media interest in taxation, our findings are crucial for assessing consumer-related non-tax costs and the benefits of different CTSs. Copyright Springer Science+Business Media Dordrecht 2014

Date: 2014
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DOI: 10.1007/s10551-013-1843-7

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