Cross-Country Evidence on Earnings Quality and Corporate Tax Avoidance: The Moderating Role of Legal Institutions
Safa Gaaya () and
Faten Lakhal ()
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Safa Gaaya: IRG, University of Paris-Est, France
Faten Lakhal: LÃ©onard de Vinci PÃ´le Universitaire, Research Center, 92916 Paris La DÃ©fense, France
Economics Bulletin, 2020, vol. 40, issue 2, 1714-1726:
The purpose of this study is to investigate the relationship between earnings quality and corporate tax avoidance, while accounting for the strength of the legal institutional environment. We find robust evidence that high earnings quality mitigates corporate tax avoidance practices. Furthermore, we find that this association is particularly stronger when country-level legal institutions are powerful. Thus, this study should provide useful insights to academics, professionals as well as policy makers by emphasizing the vital role that accounting information quality could play in the fight against tax avoidance and the important support that legal institutions could provide in this regard.
Keywords: Earnings quality; accruals quality; earnings precision; tax avoidance; law enforcement; legal institutions. (search for similar items in EconPapers)
JEL-codes: G3 H2 (search for similar items in EconPapers)
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Working Paper: Cross-Country Evidence on Earnings Quality and Corporate Tax Avoidance: The Moderating Role of Legal Institutions (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-20-00303
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