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Haven-sent? Tax havens, corporate social irresponsibility, and the dark side of family firm internationalization
journal contributionposted on 01.10.2021, 12:41 by Yama Temouri, Giulio NardellaGiulio Nardella, Chris Jones, Stephen Brammer
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 behavioral agency model (BAM) and socioemotional wealth (SEW) perspectives, our study explores the ‘dark side’ of family firm internationalization, by focusing specifically on the use of tax havens. We theorize that decision tradeoffs to internationalize to tax haven locations tend to be tempered by SEW considerations in family firms, which subsequently decreases the propensity of family firms to engage in this form of CSI, when compared to non-family firms. We explore how family firm heterogeneity, such as relationships with tax advisors and generational involvement in the family business, influence their propensity for tax haven internationalization. Our analysis examines 1,024 U.S. family and non-family firms between 2010 and 2018, and confirms the effects of SEW and family firm heterogeneity on tax haven internationalization.
- Business and Economics