Local business environment, managerial expertise and tax corruption of small- and medium-sized enterprises

Vu Nam (), Tuan Anh Bui (), Ngoc Minh Nguyen () and Ngoc Hiep Luu ()
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Tuan Anh Bui: Faculty of International Economics, Foreign Trade University, Hanoi, Vietnam
Ngoc Minh Nguyen: Centre for Applied Economics and Business Research, Hanoi, Vietnam
Ngoc Hiep Luu: Centre for Applied Economics and Business Research, Hanoi, Vietnam

Baltic Journal of Economics, 2021, vol. 21, issue 2, 134-157

Abstract: While tax corruption is widespread in many countries with inferior business environments, it is unclear how the characteristics of taxpayers influence their tax behaviour. This study investigates the impact of manager expertise on firms’ tax corruption in a transition economy. Using a longitudinal dataset consisting of small- and medium-sized enterprises in Vietnam over the period from 2005 to 2015, we find that firms which are managed by more able managers are more likely to engage in tax corruption and are willing to offer higher amounts of bribe payments. We also find that improving the quality of the local business environment is associated with lower tax corruption. When the quality of the local business environment is improved, managers with greater knowledge of existing laws and regulations, and more working experience, engage less in tax corruption. Our findings imply that improving the quality of the local business environment is important for reducing tax corruption in transition economies.

Keywords: Tax corruption; managerial expertise; local business environment; Vietnam; SME (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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