Whilst tax haven use by multinational enterprises (MNEs) is often associated with economic and societal harm, studies have theorized a limited relationship between tax haven use and corporate reputation. This is surprising, given the wealth of evidence which illustrates how corporate reputations are frequently damaged following socially and economically harmful MNE activity. To advance our understanding, this study focuses on the underexplored heterogeneity associated with tax havens, specifically - their location characteristics. Drawing on attribution theory and the country reputation perspective, we theorize and explain how MNE engagement with tax havens and countries characterized by corruption, shape stakeholder perceptions, thereby heightening reputation risks. Our longitudinal analysis, involving 1,961 tax haven subsidiaries of 326 MNEs, supports our theorizing. Among our principal contributions, this paper advances theory regarding the informal regulation of tax haven use and the dark side of international business.
