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An International Meeting of American Accounting
Association
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Culture and International Tax Rates: An Empirical Investigation |
Kallol Bagchi
University of Texas at El Paso
Gary P Braun
University of Texas at El Paso
Karl Putnam
University of Texas at El Paso
Abstract: We examine the relationship between culture and tax rates using two sets of culture measures, Hofstede’s dimensions (2001), and the GLOBE cultural dimension measures (House et al., 2004). Our regression results indicate associations between some cultural dimensions and tax rates. We find associations with Hofstede’s Uncertainty Avoidance, Power Distance, and Individualism/Collectivism. With respect to the GLOBE measures, we find associations with Performance Orientation, In-Group Collectivism, and Assertiveness. Further, the results for Hofstede’s Uncertainty Avoidance and Individualism/Collectivism, and for the GLOBE measure of Performance Orientation are significantly associated even after controlling for GDP and the Corruption Perception Index. These results suggest that companies, academic researchers, government officials, and other interested parties may be better able to predict future tax rates and resulting national and international micro and macroeconomic effects.