Culture, Social Capital and Corporate Behavior: The Long-term Effect of Historical Protestant Activities on Corporate Tax Avoidance in China
2019/05/28
研討會日期 : 2019-05-28
時間 : 14:30
主講人 : Professor Se Yan (顏色)
主持人 : Professor Terry Cheung
地點 : Conference Room B110
演講者簡介 : Professor Yan received his Ph.D. in Economics from University of California, Los Angeles (UCLA) in 2008. He is currently an Associate Professor in Guanghua School of Management, Peking University. His research interests lie at the intersection of economic history, development economics, and macroeconomics.
演講摘要 : Using a large dataset of Chinese industrial firms spanning 1999-2007 and a novel dataset documenting historical Protestant activities covering 248 cities in China, we investigate the long-term effect of Protestant activities on corporate behavior, i.e., corporate tax avoidance. To establish causality, we exploit the fact that Protestant missionaries undertook disaster relief during the late nineteenth and early twentieth century in China, and use the frequency of natural disasters to instrument the intensity of historical Protestant activities. Using instrumental variable approach, we document robust evidence that in cities with higher intensity of Protestant activities in 1920, firms are less likely to engage in tax avoidance during 1999-2007. Further, we find that historical Protestant activities lower the extent of current corporate tax avoidance by fostering trustworthiness, a key component of social capital, and we exclude other potential mechanisms. Our analyses suggest that social capital plays a significant role in shaping corporate behavior and that such an effect tends to be long-term.
