Time Orientation in Languages and Tax Avoidance

C. S.Agnes Cheng, Jaehyeon Kim, Mooweon Rhee, Jian Zhou

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)


Studies suggest that when a language requires grammatical marking of future events, speakers prefer immediate payoffs and engage in less future-oriented behavior. If future costs of tax avoidance are non-trivial, we posit that strong future time reference (FTR) in languages would lower managers’ perceptions about costs, encouraging more tax avoidance. Using a large sample of 56,243 firm-year observations across 31 countries, we find that tax avoidance is higher where FTR in the language is strong. We also find that tax avoidance is more prevalent in Swiss regions with strong FTR and in US firms whose CEOs were born in countries with strong FTR. Collectively, our evidence suggests that costs of tax avoidance can be non-trivial, and that linguistically driven time perception helps explain the cross-country variation in tax avoidance.

Original languageEnglish
JournalJournal of Business Ethics
Publication statusPublished - 2022 Oct

Bibliographical note

Publisher Copyright:
© 2021, The Author(s), under exclusive licence to Springer Nature B.V.

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • General Business,Management and Accounting
  • Arts and Humanities (miscellaneous)
  • Economics and Econometrics
  • Law


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