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North Korea threat risk, Korean business groups and corporate tax avoidance

Author

Listed:
  • Lee, Gun
  • Chun, Hongmin

Abstract

Using unique North Korea threat risk data, this paper investigates the impact of North Korea threat risk on corporate tax avoidance, with a particular focus on Korean business groups. Empirical results indicate that North Korea threat risk is positively associated with corporate tax avoidance, and this relationship is more pronounced among business groups. These findings suggest that Korean business groups, which are well-diversified internationally with multiple overseas operations, may have both a greater ability and incentive to engage in tax avoidance through various channels compared to non-business group firms during periods of high North Korea threat risk, driven by opportunistic motives.

Suggested Citation

  • Lee, Gun & Chun, Hongmin, 2025. "North Korea threat risk, Korean business groups and corporate tax avoidance," Finance Research Letters, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:finlet:v:74:y:2025:i:c:s154461232500056x
    DOI: 10.1016/j.frl.2025.106791
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    More about this item

    Keywords

    North Korea threat risk; Tax avoidance; Korean business group; Opportunistic motives;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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