Local culture and tax avoidance: Evidence from gambling preference behavior

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

Global Finance Journal, 2022, vol. 52, issue C

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.

Keywords: Financial constraints; Local gambling preference; Risk taking; Tax avoidance (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:52:y:2022:i:c:s1044028320302854

DOI: 10.1016/j.gfj.2020.100585

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