Corporate Culture and Tax Planning

Mansoor Afzali*, Timmy Thor

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingConference contributionScientificpeer-review


We study the effects of corporate culture on tax planning. Using the competing
values framework and natural language processing techniques, we quantify
internally oriented corporate cultural dimensions of control and collaboration.
We predict that these dimensions of corporate cultural influence intra-organizational knowledge flows differently, ultimately influencing corporate tax planning. Hierarchical control cultures foster bureaucracy, which negatively
impacts intra-organizational knowledge exchange, ensuing higher tax burdens.
In contrast, collaboration-oriented cultures embrace lateral decision structures
that positively influence intra-organizational knowledge exchange, resulting in
lower tax burdens. Our empirical findings are consistent with these predictions:
firms with control-oriented (collaboration-oriented) cultures report higher
(lower) GAAP and cash effective tax rates. We find some evidence to suggest
that collaboration-oriented cultures achieve these corporate tax savings by
engaging in tax-sheltering activities and that such tax savings are value enhancing
Original languageEnglish
Title of host publicationProceedings of the BAFA Annual Congress 2022
Publication date2022
Publication statusPublished - 2022
MoE publication typeA4 Article in conference proceedings
EventThe 2022 British Accounting and Finance Association
annual conference with doctoral masterclasses
- University of Nottingham, Jubilee Campus, Nottingham, United Kingdom
Duration: 11.04.202213.04.2022


  • 512 Business and Management
  • corporate culture
  • competing value framework
  • text analysis
  • text planning
  • tax sheltering
  • Firm value

Areas of Strength and Areas of High Potential (AoS and AoHP)

  • AoS: Financial management, accounting, and governance


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