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Issue 5(1), October 2010 -- Paper Abstracts
Girard  (p. 9-22)
Cooper (p. 23-32)
Kunz-Osborne (p. 33-41)
Coulmas-Law (p.42-46)
Stasio (p. 47-56)
Albert-Valette-Florence (p.57-63)
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Nonis-Hudson-Hunt (p. 95-106) 



JOURNAL OF ACCOUNTING AND FINANCE 


An Empirical Study of the Effect of Tax Inspections/Visits on Firm’s Credit
Constraints in Developing Economies


Author(s): Meifang Xiang

Citation: Meifang Xiang, (2020) "An Empirical Study of the Effect of Tax Inspections/Visits on Firm’s Credit Constraints in Developing Economies," Journal of Accounting and Finance, Vol. 20, ss. 6, pp. 171-186

Article Type: Research paper

Publisher: North American Business Press

Abstract:

Using data largely consisting of SMEs from more than 130 countries, the study investigates the effect of government tax related inspections and/or visits on the probability of an SME being credit constrained. The results show that government tax inspections and/or visits are positively and significantly associated with an SME’s probability of being credit constrained. The results also show that when country variables are included, despite the differences among various groups, government tax inspections and/or visits increase the probability for firms to reply with severe or major financing obstacles. The study is significant not only to the literature of a firm’s credit constraint, but also to the literature of governmentbusiness relationships as well as to the literature of the strategic game between tax authorities and enterprise taxpayers. Hence, it is a study with important implications for policymakers, particularly in light of incoming hard times for businesses, SMEs in particular because of the pandemic.