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How Do Tax Agents Respond to Anti-corruption Intensity?

Author

Listed:
  • Chen Ma

    (Northwest University)

  • Maoyong Cheng

    (Xi’an Jiaotong University)

  • Gerald J. Lobo

    (University of Houston)

Abstract

We examine whether anti-corruption intensity strengthens tax enforcement effectiveness in China. Using hand-collected anti-corruption data and aggregate tax enforcement data, which include the probability of tax audits and tax deficiencies, for a sample of 11,687 firm-year observations from 2012 to 2017, we find that anti-corruption intensity increases the deterrence role and the enforcement role of tax audits. We also identify the fear effect as a possible channel through which anti-corruption intensity affects tax enforcement effectiveness. Overall, the results indicate that anti-corruption intensity can improve a revenue agency’s effectiveness.

Suggested Citation

  • Chen Ma & Maoyong Cheng & Gerald J. Lobo, 2024. "How Do Tax Agents Respond to Anti-corruption Intensity?," Journal of Business Ethics, Springer, vol. 190(1), pages 137-164, February.
    • Handle: RePEc:kap:jbuset:v:190:y:2024:i:1:d:10.1007_s10551-023-05398-w
    DOI: 10.1007/s10551-023-05398-w
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