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Cross-Country Evidence on Earnings Quality and Corporate Tax Avoidance: The Moderating Role of Legal Institutions


  • Ramzi Benkraiem

    (Audencia Business School, France)

  • Safa Gaaya

    (IRG, University of Paris-Est, France)

  • Faten Lakhal

    (Léonard de Vinci Pôle Universitaire, Research Center, 92916 Paris La Défense, France)


The purpose of this study is to investigate the relationship between earnings quality and corporate tax avoidance, while accounting for the strength of the legal institutional environment. We find robust evidence that high earnings quality mitigates corporate tax avoidance practices. Furthermore, we find that this association is particularly stronger when country-level legal institutions are powerful. Thus, this study should provide useful insights to academics, professionals as well as policy makers by emphasizing the vital role that accounting information quality could play in the fight against tax avoidance and the important support that legal institutions could provide in this regard.

Suggested Citation

  • Ramzi Benkraiem & Safa Gaaya & Faten Lakhal, 2020. "Cross-Country Evidence on Earnings Quality and Corporate Tax Avoidance: The Moderating Role of Legal Institutions," Economics Bulletin, AccessEcon, vol. 40(2), pages 1714-1726:.
  • Handle: RePEc:ebl:ecbull:eb-20-00303

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    1. Athira, A. & Ramesh, Vishnu K., 2023. "COVID-19 and corporate tax avoidance: International evidence," International Business Review, Elsevier, vol. 32(4).

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    More about this item


    Earnings quality; accruals quality; earnings precision; tax avoidance; law enforcement; legal institutions.;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue


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