Using an international sample of firms from 32 countries, we study the relation between media independence and corporate tax aggressiveness. We measure media independence by the extent of private ownership and competition in the media industry. Using an indicator variable for tax aggressiveness when the firm’s corporate tax avoidance measure is within the top quartile of each country-industry combination, we find strong evidence that media independence is associated with a lower likelihood of tax aggressiveness, after controlling for other institutional determinants, including home-country tax system characteristics. We also find that the effect of media independence is more pronounced when the legal environment is weaker, and when the information environment is less transparent. We contribute to the business ethics literature by documenting the role of independent media as an external monitoring mechanism in constraining corporate tax aggressiveness.
Tax aggressiveness, Tax systems, Media independence, CSR, corporate social responsibility, Business ethics
Accounting | Business Law, Public Responsibility, and Ethics | Corporate Finance
Corporate Governance, Auditing and Risk Management
Journal of Business Ethics
Springer Verlag (Germany)
KANAGARETNAM, Kiridaran; LEE, Jimmy; LIM, Chee Yeow; and LOBO, Gerald J..
Cross-country evidence on the role of independent media in constraining corporate tax aggressiveness. (2016). Journal of Business Ethics. 1-24. Research Collection School Of Accountancy.
Available at: http://ink.library.smu.edu.sg/soa_research/1537
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