Original scientific paper
https://doi.org/10.1080/1331677X.2020.1825105
The effect of Confucian culture on corporate tax avoidance: evidence from China
Shihua Chen
Lili Xu
Khalil Jebran
Abstract
This study investigates whether Confucian culture can influence
corporate tax avoidance. We measure Confucianism using geographical-proximity based method and opt ordinary least square
regression considering a sample of Chinese firms during
2004–2016. We find strong evidence that Confucian culture and
tax avoidance are negatively associated and this association is
less prominent for state-owned firms. Additional analysis shows
that tax enforcement efforts mitigate the effect of Confucianism
on tax avoidance. The results are consistent and robust to alternative measures of tax avoidance and Confucianism. Overall, the
findings enrich our understanding that Confucian culture reduces
tax avoidance by promoting corporate ethical behavior.
Keywords
Tax avoidance; Confucianism; tax enforcement efforts; state-owned companies; China
Hrčak ID:
301231
URI
Publication date:
31.12.2021.
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