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The moderating influence of the Big Four on 'dot' tax haven use and the extent of 'dot' tax haven use (H2)
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Family firms have been associated with an enhanced propensity for corporate social responsibility (CSR), but does this imply that family firms have a reduced propensity for corporate social irresponsibility (CSI)? Drawing on the behavioural agency model (BAM) and socio‐emotional wealth (SEW) perspectives, our study explores the ‘dark side’ of famil...
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How family firms adopt a certain corporate social responsibility (CSR) approach remains a relatively unexplored matter in family firm and firm ethics research. Hence, we study how and why the CSR approach (broad vs. narrow; benefits vs. costs) differs within family firms, addressing the influence of the socio-emotional wealth (SEW) dimensions, indi...
Citations
... Private-sector corruption by a single organization can include egregious activities such as drug and people trafficking, but those instances are deeply hidden and dangerous to observe, and as such we do not include them in this study. Instead, we focus on more widespread private-sector corruption occurring in emerging markets, such as not reporting or underreporting income, the number of employees on the payroll, or not declaring import activities to avoid those related taxes (Temouri et al., 2022) as well as discriminatory business practices (Sanyal & Samanta, 2002). In this study, we focus on organizational private-sector corruption practices by owners in charge of small entrepreneurial family firms. ...
... However, few studies have examined private corruption, which is difficult to detect, since organizations conceal it (Bahoo et al., 2020). To add to the analysis of private-sector corruption, we focus specifically on private-sector corruption where the owner of a small entrepreneurial family firm acts against existing laws and regulations to advance his or her own interests or that of his or her company and family (Sartor & Beamish, 2020;Temouri et al., 2022;Weaver et al., 2014) without engaging with an external actor, such as a public servant. ...
This research analyzes how family embeddedness affects the decision of owners in charge of small entrepreneurial family firms operating in an emerging country to participate in private-sector corruption. Prior research has typically assumed that those in charge of family firms choose to participate in corruption to receive an immediate economic benefit. We challenge this assumption and argue that family influences the decision of the owner of small entrepreneurial family firms to participate in private-sector corruption driven by the pursuit of both short-term economic (profit maximization) and long-term non-economic goals, including attaining upper social class status (even if this decreases economic gains) for the family unit. We further find that in the context of an emerging market, trusted intermediaries can be seen as family members by the owners in charge of small entrepreneurial family firms and can influence them to participate in illicit activities. We also contend that those in charge of small entrepreneurial family businesses manage participation in private-sector corruption by dissociating and framing means.
... Although some informative studies exist, most are based on individual examples (e.g., Hamid, 2014), region-specific (e.g., Song et al., 2021), or type of corruption-specific (e.g. Temouri, Nardella, Jones, & Brammer, 2022). ...
... Thus, there is disagreement as to when and whether family businesses are more corrupt than others, with studies such as Amore and Marzano (2022), Ding, Qu, and Wu (2016), Ding and Wu (2014), Kuo (2022), Martin, Campbell, and Gómez-Mejía (2016), Rondi, Benedetti, Bettinelli, and De Massis (2023), Smulowitz, Cossin, De Massis, and Lu (2023) and Temouri et al. (2022) maintaining that family firms engage less in corruption, while Krishnan and Peytcheva (2019) and Medioli, Marchini, and Mazza (2023) suggest the opposite, and Jiang and Min (2023) present a mixed and contingent picture (see also the review by Vazquez, 2018). Perhaps these disagreements are due in part to the lack of a general conceptual perspective for why and when family firm owners and leaders are most likely to engage in corrupt behavior. ...
... Specifically, corporate resources and capabilities (e.g., size, ownership, and redundant resources) have been identified as key factors influencing engagement in CSI activities (Baucus, 1994;Delmas & Burbano, 2011). For example, US family firms are less likely to adopt CSI behavior (Ding & Wu, 2014;Temouri, Nardella, Jones, & Brammer, 2022), and Chinese state-owned firms are less likely to adopt corporate criminal behavior . In addition, status theorists argue that higher corporate status and financial constraints are important drivers of CSI (Krishnan & Kozhikode, 2015). ...
Despite increased interest in corporate social irresponsibility (CSI) among business scholars, the current research is still fragmented, its findings lacking a nuanced understanding. We conduct a systematic literature review of 173 journal articles on CSI published in the field of business and synthesize insights regarding the antecedents, consequences, and mechanisms of CSI. We begin by providing a clear definition, distinct types, and the measurement methods of CSI. Then, we provide a comprehensive research framework that demonstrates the three key components of CSI research: antecedent, consequence, and moderating. Building on this, we identify additional specific research methods for each component and apply them to assess and analyze the existing research findings and research gaps concerning CSI. We suggest that scholars pay more attention to (a) the impact of stakeholders on CSI behavior, (b) the different impacts of CSI on firm performance, (c) the relationship among CSI, corporate social responsibility, and firm performance, (d) CSI in the context of emerging economies, and (e) measuring CSI. 摘 摘要 要 尽管管理学者对企业的不负社会责任行为(CSI)的兴趣日益浓厚，但目前的研究仍很零散，对研 究结果也缺乏细致入微的解读。本文对商学领域发表的173 篇有关CSI 的学术论文进行了系统性文献 回顾，并对CSI 的前因、后果和机制进行了归纳。本文首先对CSI 的定义、类型和测量方法进行了阐 述。然后提供了一个全面的研究框架来展示CSI 研究的三个关键组成部分：前因、后果和调节变量 研究。在此基础上，文章识别了每部分研究的具体研究方法，并以此来评估和分析关于CSI 的现有 研究成果以及研究差距。作者建议学者们未来更多地关注：(a) 利益相关者对CSI 行为的影响；(b) CSI 对企业绩效的不同影响；(c) CSI 、企业社会责任与企业绩效之间的互动关系； (d) 新兴经济体 背景的CSI ；以及(e) CSI 的测量。
... Business families' durable wealth stems from political lobbying and influence, the abolition of inheritance and estate taxes, the emergence and utilization of burgeoning family offices and wealth management professionals, and the use of philanthropy to accumulate and preserve family wealth (Pistor, 2019;Skalir & Glucksberg;Tait, 2019). These perspectives are often critical of business families, and they depict their wealth preservation strategies in negative, dark-side terms, such as tax evasion (Temouri et al.: 2021), offshoring wealth (Harrington, 2016), and perpetuating inequality (Piketty, 2014). ...
Much research on family business internationalization centers on the firm but is inattentive to the family behind the firm. We examine how business-families internationalize from unstable and fragile institutions. Based on a qualitative multi-case study, we theorize business families as institutional arbitrageurs who facilitate international transactions between incompatible institutional contexts to create and preserve value in international markets while adapting to the unstable and fragile home institutional environment. Our findings suggest a three-stage internationalization process representing a cumulative and varied pattern of arbitrage practices at the level of the enterprise, extended family, and individual family members. Thus, we theorize the unique aspects of the family as a hypermobile international structure with international interests, relationships, and presence. Our findings also highlight the role of individual family members during internationalization. Our study contributes to the literature on business family internationalization and institutional arbitrage.
... Other family business-specific sources of variation such as the extent of non-family involvement and its role in family firm conflicts (Rosecká and Machek 2022) or the role of family businesses' transgenerational intention, have also been studied (Suess-Reyes 2017). These differences have been found to affect family firm financing behavior (Schmid 2013;Thiele and Wendt 2017), the way family firms manage and report their earnings (Umans and Corten 2022), and the extent to which family firms engage in tax avoidance (Temouri et al. 2021). ...
... The reviewed articles document partially inconclusive results in terms of tax behaviors. Family firms are found to be less tax aggressive compared with non-family firms (Kuo 2022; Lee and Bose 2021; Mafrolla and D'Amico 2016; Steijvers and Niskanen 2014) and less likely to use tax-haven locations (Temouri et al. 2021). Opposing evidence suggests that family firms avoid more taxes (Gaaya et al. 2017;Kovermann and Wendt 2019), or that family and non-family firms do not differ regarding tax avoidance altogether (Brune et al. 2019b). ...
... The reviewed literature suggests a broad consensus regarding the role of the founder and the implied generational stages for family firm tax avoidance. The presence of the founder is linked to lower tax aggressiveness, whereas tax aggressiveness tends to increase across generations (Bauweraerts et al. 2020;Brune et al. 2019a;Clemente-Almendros et al. 2021;Temouri et al. 2021). One notable exception lies in the higher prevalence of tax haven usage among early-generation family firms (Temouri et al. 2021). ...
Family firms, as a unique organizational form, are associated with distinct finance, accounting, and tax behaviors. Prior research indicates that heterogeneity among family firms is linked to significant variation concerning these outcomes. However, the scope of dissimilarities, their empirical operationalization, and the corresponding effects of heterogeneity remain largely unexplored. Therefore, this study maps the dimensions of family firm heterogeneity addressed in extant research based on a systematic review of 91 articles published between 1999 and 2021. Focusing on heterogeneity in corporate governance and wider firm characteristics, the most relevant effects of heterogeneity for family firm finance, accounting, and tax policies are discussed in depth. The results across the 24 identified dimensions of heterogeneity show that heterogeneity is a key factor to be considered by family business scholars. Previous heterogeneity research has specifically focused on heterogeneity rooted in differences concerning the firms’ management, ownership structure, board composition, and transgenerational issues. However, this study also finds that additional conceptual and practical challenges emerge at the heterogeneity level of analysis. Several recommendations for advancing the understanding of family firm heterogeneity have been derived. In particular, the results indicate a need to distinguish more clearly between sources of heterogeneity that are strictly specific to family firms and those that extend beyond the family firm level, thereby proposing a refined, more restricted approach toward family business heterogeneity.
... More recently, Xu et al. (2022) and Jiang et al. (2022) find that a positive relation between tax avoidance and CSR reporting for a sample of Chinese companies, which is consistent with the notion that CSR reporting represents an attempt to overcome legitimacy concerns arising from tax avoidance, and the position that the benefits from tax avoidance may moderate the adverse effects of mandatory CSR disclosure, respectively. Likewise, Temouri et al. (2022) find that the decision of using tax heaven by a sample of family firms tends to decrease the propensity to engage in corporate social irresponsibility. Schochet et al. (2022) find tax avoidance to be positively associated with employee treatment, suggesting that employees require a compensation premium for bearing the increased financial risk caused by corporate tax avoidance. ...
This paper examines the relation between corporate social responsibility (CSR) performance and corporate tax avoidance in the context of Taiwan’s change from an imputation to classical tax system in 2018. Using a sample of 1,277 listed firms from 2015 to 2020, I determine that, after 2018, firms engage in tax avoidance to a greater extent. Furthermore, firms that perform well in CSR are less likely to engage in tax avoidance. After the 2018 legislative change, firms with high CSR performance are less likely to engage in tax avoidance to a greater extent. These results are consistent with the stakeholder theory and withstand a battery of robustness checks.
... Results have been contradictory: some studies show a positive between family ownership and tax aggressiveness (Steijvers and Niskanen, 2014;Mafrolla and D'Amico, 2016;Tanujaya and Itan, 2020), while others show a negative relationship (Chen et al., 2010;Moore et al., 2017;Temouri et al., 2021). ...
Purpose
This paper investigates whether board composition, a family chief executive officer (CEO) and the firm's managerial capabilities affect proactive tax management in family small and medium-sized enterprises (SMEs). The main statement is that the professionalisation of corporate government and management practices explains the difference in tax avoidance behaviour in closely held family SMEs.
Design/methodology/approach
Using the 2012 Spanish thin-capitalisation rule as a quasi-experiment, the authors estimate panel regressions with firm fixed effects and robust standard errors. This model represents a triple difference-in-differences combined with propensity score matching (PSM-DID).
Findings
Analysis shows that having a high proportion of non-family board members and a high endowment of managerial capabilities lead to tax liability optimisation in family SMEs. Conversely, familial boards and family SMEs with low managerial capabilities lack enough expertise to weigh the costs of tax avoidance over the benefits, resulting in a reluctance to engage in tax optimisation behaviours. Alike, results show no significant relation between CEO's family affiliation and tax management behaviour.
Practical implications
When implementing fiscal policies, the specific needs of family SMEs should be considered, and how these needs interact with corporate governance and managerial mechanisms. Moreover, policymakers need a deeper understanding of family SMEs in order to develop policies appropriate to their characteristics. A more comprehensive knowledge of how family firm heterogeneity affects corporate decisions, such as indebtedness and fiscal decisions, may improve public policies.
Originality/value
This study addresses the issue of tax behaviour in family SMEs in a particular event that implies a specific logic to weigh the pros and cons of each alternative: reducing debt or paying more taxes. This study’s conclusions are based on a model that deals with potential endogeneity problems, which avoids bias in the findings.
... This question also relates to how business families contribute to their host societies. An emerging research theme concerns the "hypermobility" of business families (Harrington, 2021), which refers to the international diversification of family wealth through tax-flight (Temouri, Nardella, Jones, & Brammer, 2021). Hypermobility is also associated with business family members owning multiple residences, holding golden passports, and acquiring citizenships through investment (Surak, 2020). ...
We revisit the emerging construct of business families as it is being used by four different strands of family business scholarship: the family behind the firm, the entrepreneurial family with a portfolio of activities, the governance of business families, and the role of business families in society. For each of these streams we suggest future research directions that can help to clarify heterogeneity among family businesses as well as lead to theorizing through connections with other disciplines. We suggest that the thriving area of scholarly attention around business families holds the potential to open a new research direction among family business scholars.
... Second, this study contributes to research on corruption by noting how the perceived susceptibility of formal institutional constraints can impact bribery payments. In doing so, this research responds to recent calls to examine how institutional complexity influences firms' corporate social irresponsibility (CSI) (Brammer et al., 2021) and firms' misbehavior in international business (Cuervo-Cazurra et al., 2021). As part of CSI, bribery constitutes stakeholder-impairing behavior based on actions that defy the rule of law (Brammer et al., 2021). ...
... In doing so, this research responds to recent calls to examine how institutional complexity influences firms' corporate social irresponsibility (CSI) (Brammer et al., 2021) and firms' misbehavior in international business (Cuervo-Cazurra et al., 2021). As part of CSI, bribery constitutes stakeholder-impairing behavior based on actions that defy the rule of law (Brammer et al., 2021). More broadly, corruption is part of the "dark side" of firms' activities in international business, which warrants further attention (Ghauri et al., 2021). ...
... Muller and Kolk, 2015). The examination of how tax regimes impact internationalization has important implications to understanding global value chains (Foss et al., 2019;Temouri et al., 2021). ...
Purpose
By distinguishing between types of institutional constraints based on their susceptibility to bribery, this study aims to highlight the different mechanisms through which institutions influence bribery and export intensity. This work highlights the susceptibility of institutional constraints as a key consideration in understanding how bribery influences institutions and has implications for export intensity.
Design/methodology/approach
This study utilizes firm-level data from World Bank Enterprise Surveys using a fractional logit estimation method.
Findings
An analysis of firm-level data from 26 emerging economies shows support for a positive relationship between permit constraints and firm-level bribery payments. In addition, results provide partial support for a negative relationship between firm-level bribery payments and export intensity. Finally, this study finds partial support for the strengthening impact of financial constraints on the negative relationship between bribery payments and export intensity. However, contrary to our expectations, results indicate that tax rate constraints can weaken the relationship between bribery payments and exports.
Originality/value
This work contributes to international business literature by analyzing how home market institutions influence firms' export intensity. In addition, the study contributes to corruption research by highlighting the importance of heterogeneous susceptibility of formal institutional constraints to bribery. The focus on bribery responds to calls for work on firm misbehavior in international business.
... Therefore, it largely remains unclear whether such risks to corporate reputations perform the function of effectively 'deterring' CSI (Karpoff, 2012;Mishina et al., 2010; see also Zarantonello et al., 2016). Whilst scholars are increasingly voicing their interest in promoting 'responsible' corporate conduct as well as deterring irresponsible corporate conduct (Barnett et al., 2020;Buckley, 2021;Gaganis et al., 2021;Temouri et al., 2022), the question remains: Does reputation risk, damage or volatility influence the propensity of organizations to engage in CSI? Overall, we propose that exploring the efficacy of social regulation in reducing the occurrence of CSI provides scholars (from multiple disciplines) with the opportunity to test and refine their previously held assumptions. ...
Whilst it is assumed that stakeholders penalize and deter corporate social irresponsibility (CSI), instances of CSI persist. Correspondingly, the literature on social regulation—which describes how non‐governmental stakeholders exert their regulatory influence on organizations—remains fragmented. To act as a springboard for future studies, this review examines the contribution of corporate reputation to our understanding of how CSI is socially regulated. Our analysis of a large (n = 448 studies) multidisciplinary body of literature unearths a set of nuanced relationships between CSI and corporate reputation. We synthesize a conceptual framework in order to map the diverse landscape of literature and its contributions. We then highlight important gaps among—as well as between—research streams to present a future research agenda. Accordingly, this review contributes to closing ‘the loop’ between CSI, corporate reputation and social regulation, thereby opening up new pathways for future research.
