Climate change, tax avoidance, and shareholder value: Evidence from the Paris Agreement
Issued Date
2024-01-01
Resource Type
ISSN
1369412X
eISSN
14682443
Scopus ID
2-s2.0-85194702043
Journal Title
International Review of Finance
Rights Holder(s)
SCOPUS
Bibliographic Citation
International Review of Finance (2024)
Suggested Citation
Chatjuthamard P., Chintrakarn P., Jiraporn P., Lee S.M. Climate change, tax avoidance, and shareholder value: Evidence from the Paris Agreement. International Review of Finance (2024). doi:10.1111/irfi.12454 Retrieved from: https://repository.li.mahidol.ac.th/handle/20.500.14594/98640
Title
Climate change, tax avoidance, and shareholder value: Evidence from the Paris Agreement
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Author's Affiliation
Corresponding Author(s)
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Abstract
Motivated by the rapidly emerging literature on climate change and finance, we explore the effect of corporate tax avoidance on shareholder value around the adoption of the Paris Climate Agreement. Companies engaging in greater tax avoidance experience significantly more favorable stock market reactions. Companies that achieve greater savings through tax avoidance have a larger surplus of resources that can be directed toward climate-related actions in alignment with the Paris Agreement, resulting in enhanced shareholder value. Furthermore, the advantageous impact of tax avoidance on shareholder wealth is significantly less pronounced for companies that pay out larger dividends.