The Relationship Between Corporate Governance and Tax Havens: A Critical Review and Future Research Directions

This review investigates the important linkages of the role
and extent of corporate governance in explaining tax haven
activity by multinational enterprises (MNEs). We contribute
to the literature by identifying and mapping how the extant
academic and policy literature has hitherto investigated:
(1) the magnitude of tax haven activity over time; (2) the
channels and mechanisms via which individual MNEs are
able to use tax havens; and (3) the determinants that may
drive MNEs to invest in tax havens. We further contribute
by identifying the linkages through more recent and exciting
research that investigates the relationship between corporate
governance factors and tax haven activity. In an attempt to
critically review and synthesize this important research, we
argue that corporate governance factors may have significant
potential for uncovering further insights into the complex nature of tax haven activity. We outline how corporate
governance concepts can help in quantitative-, qualitative-,
as well as theoretical contexts to deepen our understanding
of this phenomenon around the world.