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Local gambling culture and corporate tax aggressiveness: A trait activation perspective on informal institutions

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  • Huixiang Zeng
  • Xuemei Li
  • Zhifang Zhou
  • Yishuang Ma
  • Fangting Lv

Abstract

Based on the theory of new institutionalism and trait activation, we empirically evaluated the role of gambling culture on aggressive corporate taxation. A positive association was found between gambling culture and tax aggressiveness, the gambling culture increased the risk preferences of firm executives. The relationship was more pronounced in non‐state‐owned firms, firms with a high proportion of male executives, shortsighted executives, local CEOs, and those located in areas with less intense tax regulation and lower levels of Islamic faith. The findings enrich studies investigating the economic consequences of gambling culture and provide innovative ideas for external regulators to formulate anti‐avoidance measures.

Suggested Citation

  • Huixiang Zeng & Xuemei Li & Zhifang Zhou & Yishuang Ma & Fangting Lv, 2023. "Local gambling culture and corporate tax aggressiveness: A trait activation perspective on informal institutions," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(6), pages 3166-3184, September.
    • Handle: RePEc:wly:mgtdec:v:44:y:2023:i:6:p:3166-3184
    DOI: 10.1002/mde.3869
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