Date of Award
7-25-2024
Degree Type
Thesis
Degree Name
Master of Philosophy (MPHIL)
Discipline
Business
First Advisor
Prof. ZHANG Yue
Abstract
Research in psychology documents that repeated exposure to violence increases behavioral aggressiveness. This mechanism is likely to apply to organizations through interactions and connections among individuals within local social networks. In this study, violent crimes are used as a social context to examine local corporate aggressive behaviors. The focus is on management, which is mainly responsible for making corporate decisions. The study investigates whether firms' tax aggressiveness is positively associated with the violent crime rate surrounding their headquarters. The results of the study show a positive correlation between corporate tax aggressiveness and the violent crimes surrounding corporate headquarters. It further proves that firms with younger CEOs are more susceptible to violence. Robustness tests, including alternative tax aggressiveness proxies and violent crime proxies, also support the research findings. Furthermore, this study includes non-compliant firms and concludes similar results as the OLS regressions, mitigating the concerns of omitted variables. Taken together, this research offers robust empirical evidence to support the conclusions that corporations headquartered in high-violent-crime areas are more prone to engaging in corporate tax aggressiveness. This research responds to the prior tax research’s call to study tax aggressiveness and combine social and environmental constructs with it. It also contributes to the growing tax literature by suggesting one important factor that is closely related to corporate tax aggressiveness. It provides financial reporting information users with one more clue to detect potential tax-aggressive corporations and benefit their decision-making. Finally, this study indicates that anti-violence public expenditures have spillover effects on public revenue, benefiting the growth of aggregate tax revenues.
Language
English
Copyright
The copyright of this thesis is owned by its author. Any reproduction, adaptation, distribution or dissemination of this thesis without express authorization is strictly prohibited.
Recommended Citation
Qi, C. (2024). Does violent crime matter in tax aggressiveness? (Master's thesis, Lingnan University, Hong Kong). Retrieved from https://commons.ln.edu.hk/otd/221/