Local culture and tax avoidance: Evidence from gambling preference behavior
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.
RAS ID
32445
Document Type
Journal Article
Date of Publication
5-1-2022
Volume
52
School
School of Business and Law
Copyright
subscription content
Publisher
Elsevier
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