Employee Education and Corporate Tax Planning : Evidence from Firm-Level Reporting
Taking advantage of a unique financial reporting feature in the Chinese setting, this study examines whether the education level of a firm’s rank-and-file employees is associated with its level of tax planning. We conjecture that highly educated employees should either play an information role and facilitate corporate tax planning or play a monitoring role and restrict it. Using a variety of identification strategies, we provide evidence consistent with the monitoring role of employees in restricting tax avoidance. We find that the main effect is more pronounced when employees have the incentive and ability to “blow the whistle” on financial misreporting and managerial diversion, and there is a substitutional effect between internal and external monitoring. Overall, our study extends an emerging body of literature on the association between employee education and firm-related outcomes (Call et al., 2017), along with identifying another important determinant of corporate tax planning
Year of publication: |
2022
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Authors: | Shi, Hanzhong ; Wu, Kaishu |
Publisher: |
[S.l.] : SSRN |
Saved in:
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