Tax Transparency Moderates the Effect of Green Supply Chain and Green Accounting on Corporate Reputation and its Impact on Financial Performance Risk

Abstract

A company's reputation is influenced by its adherence to good or bad business ethics. Tax avoidance is a decision that reflects poor business ethics. Management's efforts to enhance tax transparency signal to investors that the company upholds strong ethical standards by being transparent about its taxes, which helps reduce tax avoidance. This study examines the impact of green supply chains and green accounting on corporate reputation and how these factors influence financial performance risk, with tax transparency serving as a moderating factor. The study uses a sample of 658 companies over a two-year period, selected through purposive sampling, and applies moderation regression analysis. The findings support three hypotheses and reject two, indicating that the green supply chain positively affects corporate reputation, and tax transparency strengthens the relationship between the green supply chain and green accounting with corporate reputation. The practical implication is that green supply chains can serve as a strategy to enhance corporate reputation, and tax transparency can reinforce corporate environmental policies, further improving corporate reputation.