The Accounting Review Vol. 96 No. 3 2021

The Effects of Tax Avoidance News on Employee Perceptions of Managers and Firms: Evidence from Glassdoor.com Ratings

Yoojin Lee¹; Shaphan Ng^2,3; Terry Shevlin³; Aruhn Venkat⁴

¹ California State University, Long Beach · ² Singapore Management University · ³ University of California, Irvine · ⁴ The University of Texas at Austin

Abstract

We examine whether employee perceptions of managers and firms fall following tax avoidance news. Using S&P 500 firms and generalized difference-in-differences specifications, we find that tax avoidance news negatively affects employee perceptions of managers and firms. In cross-sectional tests, we find that (1) firms and managers in consumer-facing industries suffer larger employee-related perception changes from tax avoidance news compared to other firms, and (2) well-performing firms and their managers face smaller perception changes than other firms and managers. Overall, our results are consistent with tax avoidance news negatively affecting employee perceptions of managers and firms.

DOI

10.2308/tar-2019-0148

Volume

96

Issue

3

Pages

343-372

Language

en

Sources

openalex bibtex:phds-export.bib crossref

Cite

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