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Taxes and firm size: Political cost or political power?
Belz, Thomas
;
Hagen, Dominik von
;
Steffens, Christian
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DOI:
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https://doi.org/10.1016/j.acclit.2018.12.001
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URL:
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https://www.sciencedirect.com/science/article/pii/...
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Additional URL:
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https://ssrn.com/abstract=2697468
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Document Type:
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Article
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Year of publication:
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2019
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The title of a journal, publication series:
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Journal of Accounting Literature
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Volume:
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42
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Page range:
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1-28
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Place of publication:
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Amsterdam [u.a.]
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Publishing house:
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Elsevier
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ISSN:
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0737-4607
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Publication language:
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English
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Institution:
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Business School > ABWL u. Betriebswirtschaftliche Steuerlehre (Schreiber 1999-2019)
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Subject:
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330 Economics
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Classification:
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JEL:
H25 , H26 , M41,
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Keywords (English):
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Effective tax rate , Firm size , Political cost theory , Political power theory , Meta-regression analysis
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Abstract:
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Using a meta-regression analysis, we quantitatively review the empirical literature on the relation between effective tax rate (ETR) and firm size. Accounting literature offers two competing theories on this relation: The political cost theory, suggesting a positive size-ETR relation, and the political power theory, suggesting a negative size-ETR relation. Using a unique data set of 56 studies that do not show a clear tendency towards either of the two theories, we contribute to the discussion on the size-ETR relation in three ways: First, applying meta-regression analysis on a US meta-data set, we provide evidence supporting the political cost theory. Second, our analysis reveals factors that are possible sources of variation and bias in previous empirical studies; these findings can improve future empirical and analytical models. Third, we extend our analysis to a cross-country meta-data set; this extension enables us to investigate explanations for the two competing theories in more detail. We find that Hofstede’s cultural dimensions theory, a transparency index and a corruption index explain variation in the size-ETR relation. Independent of the two theories, we also find that tax planning aspects potentially affect the size-ETR relation. To our knowledge, these explanations have not yet been investigated in our research context.
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 | Dieser Eintrag ist Teil der Universitätsbibliographie. |
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