Publication Type
Conference Paper
Version
acceptedVersion
Publication Date
6-2014
Abstract
Using an international sample of firms and a country-level index for societal trust, we study how differences in trust across countries relate to corporate tax avoidance. Consistent with our prediction, we find strong evidence that societal trust is negatively associated with corporate tax avoidance by firms, even after controlling for other determinants such as home country tax system characteristics. We also explore the effects of three country-level institutional characteristics – level of investor protection, disclosure requirement, and tax enforcement – on the relation between societal trust and tax avoidance. We predict and find that the effects of trust on tax avoidance are more pronounced when these institutions are weaker.
Keywords
Trust, Tax Avoidance, Tax Systems, Formal Institutions, Informal Institutions
Discipline
Accounting | Business Law, Public Responsibility, and Ethics | Corporate Finance
Research Areas
Financial Intermediation and Information
Publication
Journal of International Accounting Research Conference
First Page
1
Last Page
56
Citation
Kanagaretnam, Kiridaran; LEE, Jimmy; LIM, Chee Yeow; and LOBO, Gerald J..
Societal Trust and Corporate Tax Avoidance. (2014). Journal of International Accounting Research Conference. 1-56.
Available at: https://ink.library.smu.edu.sg/soa_research/1288
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Included in
Accounting Commons, Business Law, Public Responsibility, and Ethics Commons, Corporate Finance Commons