Abstract
Whilst corporate tax haven use is considered socially and fiscally unsustainable, research has mainly theorized a limited relationship between tax haven use and MNE reputation. Yet, we generally lack a nuanced conceptualization of tax havens, one which integrates their variation in country characteristics. Drawing on attribution theory and the country reputation perspective, we examine the relationship between tax haven use and MNE reputations. We theorize that when firms exploit ‘dot tax havens’ – the small island economies characterized by their financial secrecy – these locations are associated with reduced ambiguity for MNE stakeholders, thereby increasing reputation risks. Further, we propose that tax havens with the most adverse country reputations are associated significantly reduced ambiguity for MNE stakeholders, and thus, the greatest risk to the reputations of multinational companies. Overall, this paper advances theory regarding the social regulation of tax haven use and the ‘dark side’ of international business.