Local culture and tax avoidance: Evidence from gambling preference behavior

Samar Alharbi, Nader Atawnah, Md Al Mamun, Muhammad Jahangir Ali

Research output: Contribution to journalArticlepeer-review

15 Citations (Scopus)

Abstract

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.

Original languageEnglish
Article number100585
JournalGlobal Finance Journal
Volume52
DOIs
Publication statusPublished - May 2022
Externally publishedYes

Keywords

  • Financial constraints
  • Local gambling preference
  • Risk taking
  • Tax avoidance

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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