Human capital, social capital and tax avoidance in Ecuador: a regional perspective
DOI:
https://doi.org/10.25097/rep.n33.2021.04Keywords:
tax avoidance, human capital externalities, social capital, regional economicsAbstract
This paper explores the relationship between human capital, social capital (the strength of social norms and networks at the community level) and corporate tax avoidance practices. Using data for Ecuador, it finds that the proportion of accountants and occupational diversity at the canton level are negatively associated with tax avoidance, approximated by the effective income tax rate. This relationship is more pronounced for companies that do not belong to any economic group. Social capital appears to play a mediating role between human capital and tax avoidance practices. The results contribute to the existing literature on the role of social capital in regional development and highlight the role of non-economic social incentives in business practices.
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