Importing Corruption Culture from Overseas: Evidence from Corporate Tax Evasion in the United States
AbstractThis paper studies how cultural norms and enforcement policies influence illicit corporate activities. Using confidential IRS audit data, we show that corporations with owners from countries with higher corruption norms engage in higher amounts of tax evasion in the U.S. This effect is strong for small corporations and decreases as the size of the corporation increases. In the mid-2000s, the United States implemented several enforcement measures which significantly increased tax compliance. However, we find that these enforcement efforts were less effective in reducing tax evasion by corporations whose owners are from countries with higher corruption norms. This suggests that cultural norms can be a challenge to legal enforcement.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17770.
Date of creation: Jan 2012
Date of revision:
Publication status: Forthcoming: Importing Corruption Culture from Overseas: Evidence from Corporate Tax Evasion in the United States , Jason DeBacker, Bradley T. Heim, Anh Tran. in Causes and Consequences of Corporate Culture , Zingales and Poterba. 2014
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Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- M14 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
This paper has been announced in the following NEP Reports:
- NEP-ACC-2012-02-01 (Accounting & Auditing)
- NEP-ALL-2012-02-01 (All new papers)
- NEP-IUE-2012-02-01 (Informal & Underground Economics)
- NEP-PBE-2012-02-01 (Public Economics)
- NEP-SOC-2012-02-01 (Social Norms & Social Capital)
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