Institutional Environment, Ownership and Firm Taxation

Economics of Transition, Forthcoming

52 Pages Posted: 13 Dec 2012

See all articles by Wenfeng Wu

Wenfeng Wu

Shanghai Jiao Tong University - Antai College of Economics & Management

Oliver M. Rui

China Europe International Business School (CEIBS); affiliation not provided to SSRN

Chongfeng Wu

Shanghai Jiao Tong University (SJTU) - Aetna School of Management

Multiple version iconThere are 2 versions of this paper

Date Written: December 12, 2012

Abstract

This paper examines how ownership type and institutional environment affect firm taxation. Using a sample of Chinese listed firms from 1999 to 2006, we find that private firms enjoy a lower effective tax rate than local state-owned enterprises. In addition, the preferential taxation of private firms is associated with local government’s incentives to promote local economic growth. We find that private firms located in regions with a lower level of privatization receive preferential tax treatment. Our results also suggest that decentralization and interjurisdictional competition lead to financial interdependence between local governments and private firms.

Keywords: Ownership, Taxation, Institution, Interjurisdictional competition, China

JEL Classification: G32, G38, H25

Suggested Citation

Wu, Wenfeng and Rui, Oliver M. and Rui, Oliver M. and Wu, Chongfeng, Institutional Environment, Ownership and Firm Taxation (December 12, 2012). Economics of Transition, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2188649

Wenfeng Wu (Contact Author)

Shanghai Jiao Tong University - Antai College of Economics & Management ( email )

No. 1954 Huashan Road
Shanghai, Shanghai 200030
China

Oliver M. Rui

China Europe International Business School (CEIBS) ( email )

699 Hong Feng Road
Pudong
Shanghai 201206
China
86-21-28905618 (Phone)
86-21-28905620 (Fax)

HOME PAGE: http://https://www.ceibs.edu/rui-oliver

affiliation not provided to SSRN

Chongfeng Wu

Shanghai Jiao Tong University (SJTU) - Aetna School of Management ( email )

No.535 Fahuazhen Road
Shanghai, 200052
China

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