Faculty of Business Administration
Visiting Scholar Seminar


The Importance of Linguistic Characteristics on Tax Planning Calibration

Dr. Xiaojun LIN

Guangdong University of Finance and Economy


Date: 18 December 2021, Saturday
Time: 9:30am – 11:30am
Venue: E22-3076


This study investigates whether the grammatical structure of language in the region where a firm’s headquarters is located affects the firm’s decision to alter tax strategies to achieve the optimal level of tax avoidance over time. Previous studies demonstrate a relation between language structure and future-oriented behaviors, such as saving, smoking, and aggressiveness in financial reporting and tax planning. Accordingly, we predict that the way how language encode time has influential effect on the adjustment speed of convergence towards an optimal tax level. Under an international research setting, we find that the adjustment speed of tax planning calibration in weak future time reference region is much faster than that in the region with strong future time reference. The results remain robust after addressing endogeneity, taking formal institution into account, and using alternative measures for both tax burden and cultural factors. Our findings shed more light on the role of informal institution in influencing corporate tax decisions.

Keywords: social capital; tax avoidance; cultural influence


Dr. Xiaojun LIN received the B.S. degree in Accounting from Macau University of Science and Technology in 2011 and the M.S. degree in Accounting from University of Macau in 2013. She is currently an Assistant Professor at the Guangdong University of Finance and Economy.

Her research interests include culture, social capital, corporate social responsibility, and tax issue. Specifically, she focuses on identifying and understanding how informal institution affect tax avoidance, tax risk and adjustment speed of tax avoidance.