Prof. Tian Binbin, along with his collaborators Prof. Cheng Maoyong and Prof. Feng Chen from Xi'an Jiaotong University, and Prof. Fan Ziying from the Shanghai University of Finance and Economics, have officially published their paper, titled "Cultural Norms and Tax Compliance: Evidence from China," in the Journal of Economic Behavior & Organization (JEBO).
Abstract: Existing studies suggest that formal institutions can effectively constrain corporate tax avoidance and increase tax compliance, but little has been said about the role of informal institutions regarding tax compliance. This study empirically examines the long-term effect of Confucian cultural norms on corporate tax compliance using unique cultural and historical data from Sichuan Province. This study finds that the inter-generational transmission of the Confucian culture can significantly promote the tax compliance of modern firms, thereby effectively reducing tax avoidance. Simultaneously, the compliance effect is more pronounced in informal firms, such as small-scale, non-listed, and local firms. In terms of mechanism analysis, the normative effect of the Confucian culture is a key mechanism for explaining variations in corporate tax compliance behaviors under different cultural norms. Overall, this study fills a gap in the research on how informal institutions regulate the behavior of firms to a certain extent, and at the same time supplements the existing literature on understanding the long-term effects of the Confucian culture.
About the author: Tian Binbin is a Distinguished Professor of Wenlan School of Business at Zhongnan University of Economics and Law, a researcher at the Innovation and Talent Base for Income Distribution and Public Finance, a doctoral supervisor, a candidate for the National Talent Project, and Young Top-notch Talent in Hubei Province. His research interests include public finance, empirical taxation and development economics. His researches have been published in Economic Research Journal, Journal of Management World, The Journal of World Economy, China Economic Quarterly, Journal of Economic Behavior & Organization, China Economic Review and etc. He has presided over a number of provincial and ministerial projects such as the General Program and Youth Program of the National Natural Science Foundation of China, and the Humanities and Social Sciences Fund Project of the Ministry of Education. He has won many honors such as the First Prize of Social Science Outstanding Achievement Award in Hubei, the First Prize of Outstanding Achievements in Tax Research of the Chinese Tax Institute, and the Best Paper Award at Camphor Finance Conference. He is also a director of Young and Middle-aged Tax Research Association of the Chinese Tax Institute.