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Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia

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 poli...

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Main Authors: Adhikari, Ajay, Derashid, Chek, Zhang, Hao
Format: Article
Language:English
Published: Elsevier Inc 2006
Subjects:
HF5601 Accounting
HJ Public Finance
Online Access:http://repo.uum.edu.my/10657/1/S.pdf
http://repo.uum.edu.my/10657/
http://dx.doi.org/10.1016/j.jaccpubpol.2006.07.001
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spelling my.uum.repo.106572014-04-21T03:56:45Z http://repo.uum.edu.my/10657/ Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia Adhikari, Ajay Derashid, Chek Zhang, Hao HF5601 Accounting HJ Public Finance 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. Elsevier Inc 2006 Article PeerReviewed application/pdf en http://repo.uum.edu.my/10657/1/S.pdf Adhikari, Ajay and Derashid, Chek and Zhang, Hao (2006) Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia. Journal of Accounting and Public Policy, 25 (5). pp. 574-595. ISSN 0278-4254 http://dx.doi.org/10.1016/j.jaccpubpol.2006.07.001 doi:10.1016/j.jaccpubpol.2006.07.001
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HF5601 Accounting
HJ Public Finance
spellingShingle HF5601 Accounting
HJ Public Finance
Adhikari, Ajay
Derashid, Chek
Zhang, Hao
Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia
description 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.
format Article
author Adhikari, Ajay
Derashid, Chek
Zhang, Hao
author_facet Adhikari, Ajay
Derashid, Chek
Zhang, Hao
author_sort Adhikari, Ajay
title Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia
title_short Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia
title_full Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia
title_fullStr Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia
title_full_unstemmed Public policy, political connections, and effective tax rates: Longitudinal evidence from Malaysia
title_sort public policy, political connections, and effective tax rates: longitudinal evidence from malaysia
publisher Elsevier Inc
publishDate 2006
url http://repo.uum.edu.my/10657/1/S.pdf
http://repo.uum.edu.my/10657/
http://dx.doi.org/10.1016/j.jaccpubpol.2006.07.001
_version_ 1644280425223290880
score 13.211869

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