Customer and Tax Avoidance: How Does Customer Geographic Proximity Affect a Supplier’s Tax Avoidance?

Round 1

Reviewer 1 Report

First of all, I would like to thank the editor to select me as a reviewer for this paper. After reviewing, I find that th paper attempts to examine “Customer and Tax Avoidance: How Does Customer Geographic Proximity Affect a Supplier’s Tax Avoidance”. I find that this paper is interesting. The paper has a quite good discussion on the customer and tax avoidance. The data was collected in China, the missing data is carefully analyzed by Python software. And,  I have checked the descriptive statistics, I think that the quality of the data is good. The data has corrected the special treatment, therefore, it can enhance the quality of the data, and the results are more significant.

The paper run the OLS, especially performing the Heckman in order to treat the potential endogeneity concerns as well as also check for robustness. Accordingly, this analysis is highly appreciate.

For better contribution to the literature, I have some revisions that are good for enhancing the quality of the manuscript.

1.      H1a and H1b can be combined in a single sentence, maybe: Customer geographic proximity will impact on supplier tax avoidance

2.      The data excluded firms in the financial or real estate industry. I don’t know why you exclude these firms, especially real estate firms?

3.      The paper shouldn’t use lots of footnotes.

4.      More discussions on why you run only OLS techniques?

5.      More discussions on why Adjusted R2 is quite small in some cases.

Author Response

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Reviewer 2 Report

Dear Authors,

 

Although I find your work relevant and well structure I would recommend to review it and provide some spell cheques and a clearer taxonomy.

 

Regards,

 

 

Author Response

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Author Response File: Author Response.pdf

Reviewer 3 Report

The paper looks interesting and reads well. 

The authors can further address the endogeneity issues by using the Entropy balancing approach. As for the moderation effects, the authors can plot the interaction effects and calculate the marginal effect. 

Author Response

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Author Response File: Author Response.pdf

Reviewer 4 Report

Thank you for the opportunity to review this manuscript. As a researcher in this field myself, I very much enjoyed reading it. This paper examines the effect of customer geographic proximity on supplier tax avoidance among Chinese firms. While the article is informative and of potential interest among some readers, I found it difficult to justify the rationale and motivation for conducting the research. Below I describe my concerns in greater detail. I hope that my comments are viewed as constructive feedback that will help you clarify and enhance your research quality. comments are as follows:

 

Title;- Sound!

 

Keywords;- add the context of the study “China”

 

Abstract;-

-        Kindly, highlight the research contribution at the end of the abstract.

 

 

Introduction;- Apart from the major concern discussed above, the authors need to consider the followings;

 

-        I suggest the author to provide an overview about the tax avoidance topic. The author started the introduction with the literature gap “The significant variation in tax avoidance among public firms calls for more research 19 into explaining the determinants of tax avoidance” I suggest to start it with defining the main construct and provide an overview about it.

-        The introduction is too long. I do suggest the authors to reduce it with focus on the research rationality and provide a clear research objective. Ideal introduction should start with difining the important terms, followed by the research rationality (practical aspect), objective, overview of methodology and findings, research contribution. Remove unnecessary discsion and place it in the literature review section.

-        Provide a background about tax avoidance issue in China.

 

Literature review;-

- in the hypothesis development part, the author needs to choose one hypothesis (whether it is positive or negative) base on the majority of the literature, theoretical ground, or authors opinion and provide discussion than support this hypothesis. Having contradict hypotheses for the same relationship is wrong doing!

- the author may need to pay more attention to the channels for the examined relationship.

 

Methodology;-

-        Explain the analytical approach applied to analyse the data.

-        The authors have mention to address the possible endogeneity issue in the data “Moreover, this association 10 is robust after studying endogeneity concerns”. However, nothing was discussed about what is the source of the possible endogeneity issue and how the authors have address them.

-        Provide reference of studies to support the measurement for the independent variable “customer geographic proximity”

 

 

 

 

Results;

-        The moderating effect discussed in the result is not the research objective and not mentioned in the introduction, literature review. Authors need to stick with the research objective or spell out the moderating effect at the earlier sections.

-        The authors need to be more argumentative in presenting the research findings.

 

 

Conclusion;

-        Discuss the limitation of the study that could be use in future research.

-        The paper doesn't identify clearly any implications for research, it doesn't put forward a feasible research direction. The authors are suggested to discuss in depth the implication of the study (practical/theoretical).

-         

 

There are a few of typos/grammatically incorrect sentences in the manuscript that need to be remedied. The paper needs to be checked thoroughly to meet the standard required in this journal.
In-text reference and reference list are not as per the journal requirements. Check reference requirement at the journal website.

 

 

I believe your paper has merit and I am certain that it can be significantly improved. Once these comments addressed the paper will make an important contribution to the literature on this subject, Overall, I am delighted to read this manuscript. I hope that my comments and questions will provide the authors with some guidance to improve their manuscript.

Best of luck to you!

 

Author Response

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Author Response File: Author Response.pdf

Round 2

Reviewer 4 Report

Thank you for the opportunity to review this manuscript again.

I do appreciate the authors effort in revising the manuscript and enhance its quality. My minor comments are related to the introduction. (1) the introduction is too long and I do advice the authors to summarize is and remove the unnecessary discussion. (2) the discussion/findings in some sections of the results are not supported with sufficient literature. (3) remove unnecessary tables figures from the manuscript and appendix, bear in mind that 42 pages is close to book chapter.

Best of luck!

Author Response

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Author Response File: Author Response.pdf