TY - JOUR
T1 - Local culture and tax avoidance
T2 - Evidence from gambling preference behavior
AU - Alharbi, Samar
AU - Atawnah, Nader
AU - Al Mamun, Md
AU - Ali, Muhammad Jahangir
N1 - Publisher Copyright:
© 2020
PY - 2022/5
Y1 - 2022/5
N2 - We examine the association between local gambling preference culture and corporate tax avoidance. Using a firm's county-level Catholics-to-Protestants ratio as a proxy for local gambling preferences, we find a positive and significant association between local gambling preference and corporate tax avoidance activities. Our main result is driven by a high risk-taking channel and is most pronounced for firms experiencing financial constraints. Finally, we find that improved owners-managers alignment strengthens the link between local gambling preference and tax avoidance.
AB - We examine the association between local gambling preference culture and corporate tax avoidance. Using a firm's county-level Catholics-to-Protestants ratio as a proxy for local gambling preferences, we find a positive and significant association between local gambling preference and corporate tax avoidance activities. Our main result is driven by a high risk-taking channel and is most pronounced for firms experiencing financial constraints. Finally, we find that improved owners-managers alignment strengthens the link between local gambling preference and tax avoidance.
KW - Financial constraints
KW - Local gambling preference
KW - Risk taking
KW - Tax avoidance
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U2 - 10.1016/j.gfj.2020.100585
DO - 10.1016/j.gfj.2020.100585
M3 - Article
AN - SCOPUS:85097108206
SN - 1044-0283
VL - 52
JO - Global Finance Journal
JF - Global Finance Journal
M1 - 100585
ER -