Societal trust and corporate tax avoidance

• 成果类型: Article
• 署名作者: Kanagaretnam, Kiridaran; Lee, Jimmy; Lim, Chee Yeow; Lobo, Gerald
• 署名单位: York University - Canada; Singapore Management University; University of Houston System; University of Houston
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-018-9466-y
• 发表日期: 2018
• 页码: 1588-1628
• 关键词: social norms; stock-market; Aggressiveness; incentives; BEHAVIOR; equity; participants; GROWTH

摘要

Using an international sample of firms from 25 countries and a country-level index for societal trust, we document that societal trust is negatively associated with tax avoidance, even after controlling for other institutional determinants, such as home country legal institutions and tax system characteristics. We explore the effects of two country-level institutional characteristicsstrength of legal institutions and capital market pressureon the relation between societal trust and tax avoidance. We find that the relation between trust and tax avoidance is less pronounced when the legal institutions in a country are stronger and is more pronounced when the capital market pressure is stronger. Finally, we examine the relation between societal trust and tax evasion, an extreme and illegal form of tax avoidance. We show that societal trust is negatively related to tax evasion and the negative relation is less pronounced when legal institutions are stronger.