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Employee education and corporate tax outcomes: Evidence from firm-level reporting

Author

Listed:
  • Shi, Hanzhong
  • Wu, Kaishu
  • Zhai, Kerui

Abstract

Taking advantage of a unique financial reporting feature in the Chinese setting, this study examines whether the education level of a firm's rank-and-file employees is associated with its tax outcomes. We provide robust evidence that employee education is associated with reduced tax avoidance. Leveraging path analysis, we show that highly educated employees are related to corporate tax avoidance through a financial reporting channel and a corporate social responsibility (CSR) channel. In addition, we find that the main effect is more pronounced when employees have the right to voice their concerns and when the accounting department accounts for a greater portion of total employees. Finally, we show that employee education is associated with reduced tax risk. Overall, our study extends an emerging body of literature on the association between employee education and firm-related outcomes (e.g., Call, Campbell, Dhaliwal, & Moon Jr., 2017), along with finding another important determinant of corporate tax planning.

Suggested Citation

  • Shi, Hanzhong & Wu, Kaishu & Zhai, Kerui, 2025. "Employee education and corporate tax outcomes: Evidence from firm-level reporting," Advances in accounting, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:advacc:v:68:y:2025:i:c:s0882611024000567
    DOI: 10.1016/j.adiac.2024.100785
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    Keywords

    Employee education; Corporate tax outcomes; Financial reporting; CSR;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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