Job Talk

Accounting Seminar（2017-02）

Topic: Home Country Democracy and Corporate Tax Avoidance

Speaker: Jiameng Ma,National University of Singapore

Time: Friday, Feb.24, 10:30-12:00 a.m

Place: Room217, Guanghua Building 2

Abstract:

We examine the impact of home country democracy on corporate tax avoidance. Specifically, we investigate how two aspects of democracy (political freedom and electoral democracy) are associated with corporate tax avoidance respectively. Political freedom reduces tax avoidance, as participation in political decision-making process raises willingness to pay taxes. Electoral democracy increases tax avoidance, as election increases tax system complexity which in turn increases tax avoidance. Further, we find that corruption control and social stability strengthen the negative association between political freedom and tax avoidance. Corporate tax complexity as percentage of overall tax complexity strengthens the positive association between electoral democracy and tax avoidance. Additional tests show shareholder protection and being a common-law country weaken the negative association between political freedom and tax avoidance, and strengthen the positive association between electoral democracy and tax avoidance. Robustness checks using colony history as instrumental variable confirm the results.

Introduction:

Jiameng Ma is a PhD student of Accounting in Business School at National University of Singapore.

Your participation is warmly welcomed!