Importing corruption culture from overseas: Evidence from corporate tax evasion in the United States

DeBacker, Jason; Heim, Bradley T.; Tran, Anh

doi:10.1016/j.jfineco.2012.11.009

Cited by 205 publications

(50 citation statements)

References 38 publications

(25 reference statements)

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“…Consequently, researchers choose to focus on one or several dimensions that are deemed most relevant to their variables of interest. Depending on the specific economic outcomes under investigation, previous studies have considered trust, hierarchy, individualism, mastery, embeddedness, risk avoidance, tightness, egalitarianism, the perception of poverty, the attitude toward manipulation/corruption/work/politics/family ties/generalized morality, the preferences for gambling/redistribution/thriftiness, languages’ psychological distance from the future, and so on (Ahern et al, ; Alesina & Giuliano, ; Callen & Fang, ; DeBacker et al, ; Eun, Wang, & Xiao, ; Hilary & Hui, ; Holderness, ; Kanagaretnam, Lim, & Lobo, ; Kumar et al, ; Li et al, ; Pevzner, Xie, & Xin, ). In the same vein, we focus on three key elements of Confucianism, namely, loyalty, collectivism, and risk avoidance.…”

Section: Institutional Background Literature Review and Hypothesis mentioning

confidence: 99%

“…On the contrary, culture exchange and cultural clashes occur frequently, especially during the process of economic globalization. As elaborated in section 2.1, ex ante , foreign cultures that are distanced from the local cultures could represent deterrents to cross‐border investments made by firms at home (Ahern et al, ; Siegel et al, ); ex post , cultural divergence/interactions can have both positive and negative impacts on the behaviors of firms and individuals (Braguinsky & Mityakov, ; Brochet et al, ; DeBacker et al, ; Fisman & Miguel, ). In our context the opening‐up of the Chinese economy and the modernization of Chinese firms are accompanied by the diffusion of Western cultures.…”

Section: Institutional Background Literature Review and Hypothesis mentioning

confidence: 99%

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Confucianism, openness to the West, and corporate investment efficiency

Chen

Jin

et al. 2018

Euro Fin Management

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This study presents robust findings that Confucianism significantly improves investment efficiency of Chinese listed firms and that the improvement is achieved through decreasing overinvestment without inducing underinvestment. Financial reporting quality is found to be an important mechanism for the disciplinary effect of Confucianism to work. More importantly, we provide strong and consistent evidence that openness to the West neutralizes the role of the Confucianism in overinvestment. Against the backdrop of globalization, this paper offers valuable references to emerging markets that experience intensive interactions with developed economies. K E Y W O R D SConfucianism, financial reporting quality, investment efficiency, openness to the West

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Section: Institutional Background Literature Review and Hypothesis mentioning

confidence: 99%

Section: Institutional Background Literature Review and Hypothesis mentioning

confidence: 99%

Confucianism, openness to the West, and corporate investment efficiency

Chen

Jin

et al. 2018

Euro Fin Management

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“…An important strength of this study is that it uses data from over 25,000 IRS corporate tax audits; it is rare that a study's information on tax evasion is available at the taxpayer level and is derived from actual audit data. DeBacker, Heim, and Tran (2012) find that corporations with owners from more corrupt countries evade more US tax. This effect is both statistically significant and economically sizable: an average-sized firm with an owner from a country with the level of corruption of Nigeria has an evasion level that is 8 percent of the tax obligation higher than a similar firm with an owner from a country with the level of corruption of Sweden.…”

mentioning

confidence: 92%

“…DeBacker, Heim, and Tran (2012) relate corporate tax evasion of foreign-held corporations in the United States to corruption levels in the owners' countries of origin. Given that the enforcement environment is common, the corruption levels in the countries of origin can affect compliance only through a tax morale channel.…”

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confidence: 99%

Tax Morale

Luttmer

Singhal²

2014

Journal of Economic Perspectives

561

392

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For over 40 years, the benchmark economic model of tax evasion has been the Allingham and Sandmo (1972) model, in which self-interested taxpayers choose how much income to report to the tax authority by trading off the benefits of evasion (lower tax payments) against the costs of evasion (the possibility of being caught and punished). In this model, the key policy parameters affecting tax evasion are the tax rate, the detection probability, and the penalty imposed conditional on the evasion being detected.However, there is an apparent disconnect between much of the academic literature on tax compliance and the administration of tax policy. While tax administrators are obviously concerned about enforcement, they also tend to place a great deal of emphasis on improving "tax morale," by which they generally mean increasing voluntary compliance with tax laws and creating a social norm of compliance. The OECD (2001), for example, noted that " [t]he promotion of voluntary compliance should be a primary concern of revenue authorities" in its principles for good tax administration, and it has highlighted the importance of tax morale more generally (OECD 2013).Tax authorities around the world pursue policies that reflect their belief that nonpecuniary factors are important in tax compliance decisions. More than half of US states have or have had "name and shame" programs in which the names of top tax debtors are revealed publicly on state websites. In a more colorful example, the Tax Morale

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“…The logic is that TAD in the Russian Federation shall provide to residents the best conditions of implementation of activities, within the borders. To achieve the set result conditions of activities of foreign TAD [6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22] were analysed, the received analysis results allowed to constitute table 1. Having considered conditions of implementation of activities within TAD of Asia-Pacific countries, it is possible to see: in case of development of preference for residents the ministry considered international experience of creation and implementation of activities by the territories of the advancing development and offered the most attractive conditions which consist in the following [6]: 1) 0% the income tax, on property, on the land for the first 5 years;…”

Section: Ways Of Innovative Economic Development Of the Far East Of Rmentioning

confidence: 99%

Development of industry in Far East of Russia based on use of innovative investment attraction practice

Solovev

Merkusheva

2017

SHS Web Conf.

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Abstract. The article considers the issues relevant at the present stage of economic development of the Far East of the Russian Federation. One of instruments of this economic development of the region is forming the territories of the advancing development which can be considered as one of the possible ways of interaction of industrial enterprises of the subjects of the Far Eastern Federal District with partners from the Asia-Pacific states. The features of the territories of the advancing development, the criteria for classification of the subjects of the Far East as the territories of the advancing development, and the main preferences for the residents of these territories are noted. The algorithms for the estimation of prospects of the activities of the territories of the advancing development are also given in the article. Based on the conducted theoretical researches, the criteria for evaluation of the efficiency of activities of the territories of the advancing development are determined. Based on the analysis of the criteria, a mathematical model for the estimation of efficiency of advancing development territories activities was developed, which clearly demonstrated that in the current economic environment the optimum quantity of the territories of the advancing development in the Far East, securing the maximum performance indicator of their activities, is 8.

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Importing corruption culture from overseas: Evidence from corporate tax evasion in the United States

Cited by 205 publications

References 38 publications

Confucianism, openness to the West, and corporate investment efficiency

Confucianism, openness to the West, and corporate investment efficiency

Tax Morale

Development of industry in Far East of Russia based on use of innovative investment attraction practice

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