Postmaterialism and Corporate Tax Avoidance

51 Pages Posted: 13 Apr 2021

See all articles by Yujia Cui

Yujia Cui

Beijing Institute of Technology - School of Management & Economics

Jiwei Wang

Singapore Management University - School of Accountancy

Kangtao Ye

Renmin University of China - School of Business

Date Written: March 15, 2021

Abstract

This paper explores how postmaterialism culture influences corporate tax avoidance behavior. Using a proprietary dataset of China tax audits, we find that firms owned by investors from countries with higher postmaterialism values are less likely to engage in tax avoidance behavior in China. In addition, we find some evidence that the negative association between postmaterialism and tax avoidance is more pronounced when tax enforcement is stronger, indicating that national culture and formal institutions act as complements. To check the external validity of our main results, we further use a cross-country sample from 21 countries over 22 years. The evidence from the cross-country sample is consistent with the findings obtained from the China tax audits setting.

Keywords: Postmaterialism; Culture; Tax Avoidance; Tax Enforcement; China; Cross-country

JEL Classification: H26; M14; M41

Suggested Citation

Cui, Yujia and Wang, Jiwei and Ye, Kangtao, Postmaterialism and Corporate Tax Avoidance (March 15, 2021). International Journal of Accounting, Forthcoming, Singapore Management University School of Accountancy Research Paper No. 2021-138, Available at SSRN: https://ssrn.com/abstract=3825279

Yujia Cui

Beijing Institute of Technology - School of Management & Economics ( email )

Beijing, 100081
China

Jiwei Wang (Contact Author)

Singapore Management University - School of Accountancy ( email )

60 Stamford Road
Singapore, 178900
Singapore
(65) 6828 0616 (Phone)
(65) 6828 0600 (Fax)

HOME PAGE: http://www.mysmu.edu/faculty/jwwang/

Kangtao Ye

Renmin University of China - School of Business ( email )

Beijing
China

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