Publication Type

Journal Article

Version

acceptedVersion

Publication Date

1-2022

Abstract

This paper explores how postmaterialism culture influences corporate tax avoidance behavior. Using a proprietary dataset of China tax audits, we find that firms owned by investors from countries with higher postmaterialism values are less likely to engage in tax avoidance behavior in China. In addition, we find some evidence that the negative association between postmaterialism and tax avoidance is more pronounced when tax enforcement is stronger, indicating that national culture and formal institutions act as complements. To check the external validity of our main results, we further use a cross-country sample from 21 countries over 22 years. The evidence from the cross-country sample is consistent with the findings obtained from the China tax audits setting.

Keywords

Postmaterialism, Culture, Tax Avoidance, Tax Enforcement, China, Cross-country

Discipline

Accounting | Corporate Finance

Research Areas

Corporate Reporting and Disclosure

Publication

International Journal of Accounting

ISSN

0020-7063

Publisher

World Scientific Publishing

Copyright Owner and License

Authors

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