Work

Local donation culture and corporate tax avoidance: Evidence from China

Year: 2023

Type: article

Abstract: Using a sample of Chinese A‐share listed firms over the period 2010–2017, this paper investigates the impact of local donation culture on corporate tax avoidance. We find that firms located in areas with a strong local donation culture are less engaged in tax avoidance. The results remain robust under a variety of robustness tests. Furthermore, we find that this relationship is driven by enhancing the moral identity of managers. In further analysis, we also explore the role of media attention, chief executive officer's (CEO's) childhood famine experience, and CEO duality in the relationship between local donation culture and corporate tax avoidance. This study enriches the existing literature on culture and firms' behaviors, and the conclusion of this paper has significant policy implications for governing corporate tax avoidance.

Source: Economics and Politics

DOI: 10.1111/ecpo.12268

Authors: Chuanlu Ge, Yuhan Bi, Jia Xu

Institutions: Beijing Technology and Business University, Beijing Normal University

Language: English

Topic: Corporate Taxation and Avoidance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: bronze

Funder: Beijing Technology and Business University