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Competition and Tax Evasion: A Cross Country Study

Author

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  • Yiqun Wang

    (University of Illinois at Urbana-Champaign, Department of Economics, 214 DKH, 1407 W. Gregory, Urbana, Illinois 61801,U.S.A.)

Abstract

This paper investigates the determinants of tax evasion, utilizing rich cross-country data of firm-level survey from the World Bank, and shows that competition is a key factor determining evasion activities; however its effect displays a decreasing trend. It is also shown that business obstacles facing firms such as tax administration and unfair practices play significant roles in explaining tax evasion. Firm characteristics such as size, age, ownership are also found important determinants. The empirical analysis controls for industry and country-level effects, for instance quality of the legal environment.

Suggested Citation

  • Yiqun Wang, 2012. "Competition and Tax Evasion: A Cross Country Study," Economic Analysis and Policy, Elsevier, vol. 42(2), pages 189-208, September.
    • Handle: RePEc:eee:ecanpo:v:42:y:2012:i:2:p:189-208
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    Citations

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    Cited by:

    1. Raffaella Coppier & Elisabetta Michetti & Luisa Scaccia, 2022. "Industrial structure and evasion dynamics, is there any link?," Metroeconomica, Wiley Blackwell, vol. 73(4), pages 960-986, November.
    2. Khalil, Sandra & Sidani, Yusuf, 2020. "The influence of religiosity on tax evasion attitudes in Lebanon," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 40(C).
    3. Laszlo Goerke, 2021. "Tax Evasion by Firms," IAAEU Discussion Papers 202104, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    4. Leonardo Andrade Rocha & Ahmad Saeed Khan & Patrícia Verônica Pinheiro Sales Lima & Maria Ester Dal Poz & Fernando Porfirio Soares De Oliveira, 2016. "Corrupção, Burocracia E Outras Falhas Institucionais: O “Câncer” Da Inovação E Do Desenvolvimento," Anais do XLIII Encontro Nacional de Economia [Proceedings of the 43rd Brazilian Economics Meeting] 090, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].

    More about this item

    Keywords

    tax evasion; competition; legal environment;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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