Importing Corruption Culture from Overseas: Evidence from Corporate Tax Evasion in the United States

Jason M. DeBacker, Bradley T. Heim, Anh Tran

NBER Working Paper No. 17770
Issued in January 2012
NBER Program(s):   CF   ITI   LE   PE   POL

This paper studies how cultural norms and enforcement policies influence illicit corporate activities. Using confidential IRS audit data, we show that corporations with owners from countries with higher corruption norms engage in higher amounts of tax evasion in the U.S. This effect is strong for small corporations and decreases as the size of the corporation increases. In the mid-2000s, the United States implemented several enforcement measures which significantly increased tax compliance. However, we find that these enforcement efforts were less effective in reducing tax evasion by corporations whose owners are from countries with higher corruption norms. This suggests that cultural norms can be a challenge to legal enforcement.

You may purchase this paper on-line in .pdf format from ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.



Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w17770

Forthcoming: Importing Corruption Culture from Overseas: Evidence from Corporate Tax Evasion in the United States, Jason DeBacker, Bradley T. Heim, Anh Tran. in Causes and Consequences of Corporate Culture, Zingales and Poterba. 2014

Users who downloaded this paper also downloaded these:
Engel and Hines w6903 Understanding Tax Evasion Dynamics
Crocker and Slemrod w10690 Corporate Tax Evasion with Agency Costs
Olken and Pande w17398 Corruption in Developing Countries
Slemrod and Yitzhaki w7473 Tax Avoidance, Evasion, and Administration
Braguinsky and Mityakov w17731 Foreign Corporations and the Culture of Transparency: Evidence from Russian Administrative Data

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us