How Does Corruption in Developing Countries Affect Corporate Investment and Tax Compliance?

Konferenzbeitrag

Using a rich panel data base for firms in Asian countries, we assess the effect of public sector corruption on corporate assets investment and tax payments. Our findings suggest that public sector corruption does not deter investment activities of national firms while asset investment of multinational corporations is significantly reduced in corrupt environments. Moreover, the findings indicate that corruption exerts a quantitatively large negative effect on corporate tax payments, especially for the group of small and medium-sized national firms. The results appear across a large range of specifications and robustness tests and suggest that even modest reductions in public sector corruption may induce significant increases in a country's tax capacity.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Corporate Taxation ; No. A17-V1

Classification and Topics

• Classification: Wirtschaft ; Business Taxes and Subsidies including sales and value-added (VAT) ; Multinational Firms; International Business ; Fiscal Policies and Behavior of Economic Agents: Firm
• Subject: corruption ; developing countries ; multinational firm ; tax payments

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Riedel, Nadine ; Fuest, Clemens ; Maffini, Giorgia
• Event: Veröffentlichung
• (who): Verein für Socialpolitik
• (where): Frankfurt a. M.
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/37224
• Last update: 10.03.2025, 11:41 AM CET