Importing Corruption Culture from Overseas: Evidence from Corporate Tax Evasion in the United States

Jason DeBacker (), Bradley Heim and Anh Tran

No 17770, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies how cultural norms and enforcement policies influence illicit corporate activities. Using confidential IRS audit data, we show that corporations with owners from countries with higher corruption norms engage in higher amounts of tax evasion in the U.S. This effect is strong for small corporations and decreases as the size of the corporation increases. In the mid-2000s, the United States implemented several enforcement measures which significantly increased tax compliance. However, we find that these enforcement efforts were less effective in reducing tax evasion by corporations whose owners are from countries with higher corruption norms. This suggests that cultural norms can be a challenge to legal enforcement.

JEL-codes: D73 H25 M14 (search for similar items in EconPapers)
Date: 2012-01
New Economics Papers: this item is included in nep-acc, nep-iue, nep-pbe and nep-soc
Note: CF ITI LE PE POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Published as Importing Corruption Culture from Overseas: Evidence from Corporate Tax Evasion in the United States , Jason DeBacker, Bradley T. Heim, Anh Tran. in Causes and Consequences of Corporate Culture , Zingales and Poterba. 2015
Published as DeBacker, Jason & Heim, Bradley T. & Tran, Anh, 2015. "Importing corruption culture from overseas: Evidence from corporate tax evasion in the United States," Journal of Financial Economics, Elsevier, vol. 117(1), pages 122-138.

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Related works:
Journal Article: Importing corruption culture from overseas: Evidence from corporate tax evasion in the United States (2015)
Chapter: Importing Corruption Culture from Overseas: Evidence from Corporate Tax Evasion in the United States (2011)
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