Corporate thanksgiving in blissful nations: An empirical analysis of happiness and corporate tax avoidance

•This paper examines the corporate under-sheltering tax puzzle by investigating how a nation's happiness affects corporate tax management.•We provide initial evidence that happiness deters corporate tax management.•This association is more pronounced among firms in well-governed countries. This paper examines the corporate under-sheltering tax puzzle by investigating how a nation's happiness affects corporate tax management. Drawing on the theory of the economics of happiness, our findings provide initial evidence that happiness deters corporate tax management. This association is more pronounced among firms in well-governed countries.