• behavioural agency model (BAM)
• corporate social irresponsibility (CSI)
• domestic institutional owners (DIOs)
• foreign institutional owners (FIOs)
• human rights abuses (HRA)
• multinational enterprises (MNEs)
• neo-institutional theory
• tax havens

This research examines the influence of multinational enterprises’ (MNEs) strategies for international expansion in tax haven jurisdictions on their likelihood of engaging in human rights abuses (HRA). The study builds on neo-institutional theory and behavioural agency model (BAM) to elucidate the relationship between MNEs leveraging the legal manipulations and economic advantages of tax havens and human rights breaches. The empirical analysis employs a sample of 77 European MNEs observed during the period 2000-2020 to argue that the presence in tax havens correlates with an increased likelihood of human rights violations. The findings provide evidence that there is a heightened prevalence of human rights violations among MNEs that have engaged with tax havens. This demonstrates that tax strategies can be associated with instances of corporate misconduct. The research further explored the impact of institutional ownership on this relationship, distinguishing between foreign institutional owners (FIOs) and domestic institutional owners (DIOs). The results show that the effect of tax haven utilisation on the incidence of HRA is moderated for MNEs with a higher proportion of shares held by FIOs. Conversely, the mitigating role of DIOs is not found to be statistically significant in strengthening this relationship in the primary analysis. However, supplementary analysis revealed a significant negative moderating effect, indicating that they play a pivotal role under specific tax haven classifications.
The findings contribute to the ongoing academic discourse on corporate social irresponsibility (CSI) by providing quantitative evidence on how tax haven structures intersect with firms’ propensity to behave irresponsibly, thereby undermining human rights. From a practical perspective, the findings imply that governments and policymakers should implement binding national and international regulatory frameworks to guarantee MNEs’ accountability for their global operations and any misbehaviour.