Does good governance moderate the relationship between blockchain technology use and tax evasion? Evidence from STOXX 600

Abstract

PurposeThis paper aimed to shed light on the relationship between blockchain technology intensity and tax evasion and whether this relationship is moderated by good governance.Design/methodology/approachData from a sample of 50 European companies selected from the STOXX 600 index between 2010 and 2019 were used to test the model via panel data and multiple regression. Here, we used the generalized least squares method estimated on panel data. A multivariate regression model was used to analyze the moderating effect of good governance on the association between blockchain technology intensity and tax evasion. For the robustness analyses, we included the comparative study of legal systems. We performed an additional analysis by testing the dynamic dimension of the data set using the generalized method of moments to control for the endogeneity problem.FindingsExpectedly, the results showed a negative relationship between blockchain technology intensity and tax evasion. Furthermore, the findings suggest that the moderating variable negatively affects the relationship between blockchain technology and tax evasion.Originality/valueTo our knowledge, this study supports the existing literature. Firstly, it expands the scientific debate on tax evasion. Secondly, it extends the scope of the agency theory, which is used to explain the phenomena associated with tax evasion. This study is one of the first to examine the moderating effect of good governance on the association between blockchain technology intensity and tax evasion.