Economic policy uncertainty and tax avoidance: International evidence

IF 5.6 2区 经济学 Q1 BUSINESS, FINANCE Emerging Markets Review Pub Date : 2024-04-20 DOI:10.1016/j.ememar.2024.101135
A. Athira , Vishnu K. Ramesh
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Abstract

In this study, we investigate how economic policy uncertainty (EPU) influences corporate tax avoidance using a dataset of listed firms from 22 countries spanning 1999 to 2019. Our findings align with the agency motive, showing that as EPU increases, firms tend to decrease their tax avoidance practices. Further analysis reveals that this negative relationship is particularly strong among unconstrained firms. We also observe that strong firm-level governance is associated with reduced tax avoidance during periods of heightened EPU. Furthermore, we investigate how institutional characteristics at the country level influence the relationship between EPU and firms' tax avoidance strategies. We find that firms in countries with strong governance, situated in developed economies, and adhering to stringent auditing standards are less inclined to engage in tax avoidance amid increasing EPU. Conversely, firms in countries with low GDP per capita, low governance scores, and located in emerging economies demonstrate a positive association between tax avoidance and EPU. Overall, our research highlights EPU as a key driver of corporate tax management, offering policymakers valuable insights into its potential impact on tax planning.

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经济政策的不确定性与避税:国际证据
在本研究中,我们利用 1999 年至 2019 年期间 22 个国家的上市公司数据集,研究了经济政策不确定性(EPU)如何影响企业避税。我们的研究结果与代理动机相吻合,表明随着经济政策不确定性的增加,企业往往会减少避税行为。进一步的分析表明,这种负相关关系在不受制约的公司中尤为明显。我们还观察到,在 EPU 上升期间,公司层面的强有力治理与避税行为的减少相关联。此外,我们还研究了国家层面的制度特征如何影响 EPU 与企业避税策略之间的关系。我们发现,位于发达经济体且遵守严格审计标准的强治理国家的企业在 EPU 增加时更少倾向于避税。相反,人均 GDP 低、治理得分低、位于新兴经济体的国家的企业则表现出避税与 EPU 之间的正相关。总之,我们的研究强调了 EPU 是企业税务管理的一个关键驱动因素,为政策制定者了解其对税务筹划的潜在影响提供了宝贵的见解。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
7.10
自引率
4.20%
发文量
85
审稿时长
100 days
期刊介绍: The intent of the editors is to consolidate Emerging Markets Review as the premier vehicle for publishing high impact empirical and theoretical studies in emerging markets finance. Preference will be given to comparative studies that take global and regional perspectives, detailed single country studies that address critical policy issues and have significant global and regional implications, and papers that address the interactions of national and international financial architecture. We especially welcome papers that take institutional as well as financial perspectives.
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