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Corporate culture and tax planning

Author

Listed:
  • Mansoor Afzali

    (Hanken School of Economics)

  • Timmy Thor

    (Hanken School of Economics)

Abstract

In this paper, we study the relationship between corporate culture and tax planning. Using the competing values framework and natural language processing techniques, we document that firms with collaboration-oriented (control-oriented) corporate cultures are associated with lower (higher) effective tax rates. We further find that firms with collaboration-oriented corporate cultures achieve these tax savings by engaging in tax-sheltering activities and that such savings positively affect firm value. While firms with salient control-oriented characteristics have previously been recognized to benefit from small tax burdens, we contribute with new evidence suggesting that intra-organizational reciprocity also promote tax savings that ultimately benefit shareholders.

Suggested Citation

  • Mansoor Afzali & Timmy Thor, 2025. "Corporate culture and tax planning," Review of Quantitative Finance and Accounting, Springer, vol. 64(2), pages 861-898, February.
    • Handle: RePEc:kap:rqfnac:v:64:y:2025:i:2:d:10.1007_s11156-024-01320-1
    DOI: 10.1007/s11156-024-01320-1
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    More about this item

    Keywords

    Corporate culture; Competing values framework; Text analysis; Tax planning; Tax sheltering; Firm value;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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