Limited empirical evidence exists regarding investor perceptions of tax management and whether investors consider paying taxes a social responsibility. To fill this gap, we use an experiment to explore investor perceptions about the corporate duty to pay or minimize taxes. We find that investors view paying taxes (rather than minimizing taxes) as socially responsible. We also measure participants' attitudes about the corporate duty to pay or minimize taxes and find that participants lean more toward a view that corporations have a duty to pay taxes. In a path analysis, we find that a firm's tax management and its performance in a non-tax area of CSR both influence investors' perceptions of managerial quality that ultimately impacts investors' willingness to invest. We also find that the investor's attitude about the corporate tax duty moderates the association between tax management and investor perceptions of the quality of managerial decision-making.

JEL Classifications: H25; H26; M14.

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