Hechtner F, Weiß M, Seebeck A, Hardeck I (2024)
Publication Language: English
Publication Type: Other publication type
Publication year: 2024
URI: https://ssrn.com/abstract=4910591
Open Access Link: https://ssrn.com/abstract=4910591
We exploit the adoption of the Global Reporting Initiative (GRI) 207 standard by publicly listed firms in the EU to examine the effect of tax sustainability disclosure on corporate tax avoidance. GRI 207 is the first tax-related sustainability reporting standard that requires GRI reporting firms for whom taxes are a material topic to disclose mostly qualitative tax information. Using a difference-in-differences design, we find that GRI 207-adopting firms increase their GAAP effective tax rates (ETRs) by approximately two percentage points. The results hold through multiple robustness tests aimed at mitigating endogeneity concerns. Based on several textual analysis approaches, we document that many adopters announce that they are taking significant actions, such as implementing new tax strategies and tax compliance management systems. Moreover, we show that ETR increases are greater for firms whose disclosures show a more positive tone. Overall, our findings suggest that GRI 207 could deter corporate tax avoidance.
APA:
Hechtner, F., Weiß, M., Seebeck, A., & Hardeck, I. (2024). Does Public Tax Sustainability Disclosure Deter Corporate Tax Avoidance? Evidence from GRI 207 Reporting.
MLA:
Hechtner, Frank, et al. Does Public Tax Sustainability Disclosure Deter Corporate Tax Avoidance? Evidence from GRI 207 Reporting. 2024.
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