Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1006235 | Journal of Accounting and Public Policy | 2006 | 22 Pages |
Abstract
This study examines the link between effective tax rates (ETR) and political connections in developing economies. The political connections explanation is informed by the observation that developing economies tend to be “relationship-based” rather than “market-based” capitalisms. Two proxies of political patronage are developed and applied to a group of Malaysian firms over a 10-year period. We find firms with political connections pay tax at significantly lower effective rates than other firms. Our results suggest that political connections are an important determinant of ETR in relationship-based economies.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Accounting
Authors
Ajay Adhikari, Chek Derashid, Hao Zhang,