Local culture and tax avoidance: Evidence from gambling preference behavior

Document Type

Journal Article

Publication Title

Global Finance Journal

Volume

52

Publisher

Elsevier

School

School of Business and Law

RAS ID

32445

Comments

Alharbi, S., Atawnah, N., Al Mamun, M., & Ali, M. J. (2022). Local culture and tax avoidance: Evidence from gambling preference behavior. Global Finance Journal, 52, 100585. https://doi.org/10.1016/j.gfj.2020.100585

Abstract

We examine the association between local gambling preference culture and corporate tax avoidance. Using a firm's county-level Catholics-to-Protestants ratio as a proxy for local gambling preferences, we find a positive and significant association between local gambling preference and corporate tax avoidance activities. Our main result is driven by a high risk-taking channel and is most pronounced for firms experiencing financial constraints. Finally, we find that improved owners-managers alignment strengthens the link between local gambling preference and tax avoidance.

DOI

10.1016/j.gfj.2020.100585

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Link to publisher version (DOI)

10.1016/j.gfj.2020.100585