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Local business environment, managerial expertise and tax corruption of small- and medium-sized enterprises

Author

Listed:
  • Nam Hoang Vu

    (Faculty of International Economics, Foreign Trade University, Hanoi, Vietnam)

  • Tuan Anh Bui

    (Faculty of International Economics, Foreign Trade University, Hanoi, Vietnam)

  • Ngoc Minh Nguyen

    (Centre for Applied Economics and Business Research, Hanoi, Vietnam)

  • Ngoc Hiep Luu

    (Centre for Applied Economics and Business Research, Hanoi, Vietnam)

Abstract

While tax corruption is widespread in many countries with inferior business environments, it is unclear how the characteristics of taxpayers influence their tax behaviour. This study investigates the impact of manager expertise on firms’ tax corruption in a transition economy. Using a longitudinal dataset consisting of small- and medium-sized enterprises in Vietnam over the period from 2005 to 2015, we find that firms which are managed by more able managers are more likely to engage in tax corruption and are willing to offer higher amounts of bribe payments. We also find that improving the quality of the local business environment is associated with lower tax corruption. When the quality of the local business environment is improved, managers with greater knowledge of existing laws and regulations, and more working experience, engage less in tax corruption. Our findings imply that improving the quality of the local business environment is important for reducing tax corruption in transition economies.

Suggested Citation

  • Nam Hoang Vu & Tuan Anh Bui & Ngoc Minh Nguyen & Ngoc Hiep Luu, 2021. "Local business environment, managerial expertise and tax corruption of small- and medium-sized enterprises," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 21(2), pages 134-157.
    • Handle: RePEc:bic:journl:v:21:y:2021:i:2:p:134-157
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    File URL: https://www.tandfonline.com/doi/pdf/10.1080/1406099X.2021.1990473?needAccess=true
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    Cited by:

    1. Zhou, Kuo & Luo, Haotian & Ye, Diyu & Tao, Yunqing, 2022. "The power of anti-corruption in environmental innovation: Evidence from a quasi-natural experiment in China," Technological Forecasting and Social Change, Elsevier, vol. 182(C).

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