Mixed Ownership Reform and Corporate Tax Avoidance: Evidence of Chinese Listed Firms
52 Pages Posted: 24 Sep 2021
Date Written: September 22, 2021
Abstract
We find a significant negative relationship between a firm’s mixed-ownership reform intensity ratio and the degree of corporate tax avoidance in China between 2003 and 2018. The path analyses demonstrate our finding is through the channel of a firm’s financial constraints and analysts’ earnings forecast dispersion. Furthermore, our main results are more pronounced for firms with a high level of media coverage and located in a region of weak tax enforcement or high willingness of government decentralisation. Finally, our results remain significant after alleviating a series of endogenous tests and robustness tests. We contribute to the literature to understand the causes of a firm’s tax avoidance behaviour and the consequence of the mixed-ownership reform in China.
Keywords: mixed-ownership reform intensity, corporate tax avoidance, State-Owned Enterprises, China.
Suggested Citation: Suggested Citation