The Resource Financial constraints and firm tax evasion

Financial constraints and firm tax evasion

Label
Financial constraints and firm tax evasion
Title
Financial constraints and firm tax evasion
Creator
Subject
Language
eng
Summary
This paper uses data from the Business Environment and Enterprise Performance Survey to examine tax evasion at the firm level, focusing on a novel determinant of firm tax evasion: the financial constraints (or credit constraints) faced by the firm. The empirical results indicate across a range of alternative specifications that more financially constrained firms are more likely to be involved in tax evasion activities, largely because evasion helps them deal with financing issues created by financial constraints. The authors further show that the effects of financial constraints are heterogeneous across firm ownership, firm age, and firm size. Lastly, they present some suggestive evidence on the possible channels through which the impact of financial constraints on firm tax evasion may operate, including a reduction of information disclosure through the banking system, an increase in the use of cash for transactions, and an increase in bribe activities in exchange for tax evasion opportunities
Citation source
In: International tax and public finance. - New York. - Vol. 26 (2019), no. 1 ; p. 71-102
http://library.link/vocab/creatorName
  • Alm, J
  • Liu, Y
  • Zhang, K
Geographic coverage
International
Language note
English
http://library.link/vocab/subjectName
  • tax evasion
  • corporate income tax
  • tax avoidance
  • disclosure
  • banking
  • financing
  • bribery
Label
Financial constraints and firm tax evasion
Instantiates
Publication
Label
Financial constraints and firm tax evasion
Publication

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