Document Type
Article
Publication Date
9-2012
Abstract
Tax compliance is an important issue for governments and the public alike. To meet public needs and fund public mandates, firms around the world are expected to comply with tax laws. Factors that are related to organizational (firm) tax compliance have not been sufficiently examined in the literature. Due to the increasing global influence of transition economies, factors associated with firm tax compliance in transition economies are particularly of interest. Based on a sample of over 5,000 firms from 22 former Soviet Bloc transition economies, we find that higher levels of corruption and higher levels of particularized trust (reliance on friends and family) are associated with lower levels of tax compliance. Interestingly, we also find that the negative relationship between corruption and tax compliance is weakened in situations of higher generalized trust (trust in strangers). Overall, our study’s results suggest that institutional factors play an important role and are related to firm tax compliance behavior in transition economies.
Published In
Alon, A., & Hageman, A. M. (2012). The impact of corruption on firm tax compliance in transition economies: Whom do you trust? Journal of Business Ethics, doi: 0.1007/s10551-012-1457-5
Publication Title
Journal of Business Ethics
ISSN
1573-0697
DOI
0.1007/s10551-012-1457-5
Included in
Business Law, Public Responsibility, and Ethics Commons, Finance and Financial Management Commons, International Business Commons