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)

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 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. 535 Fahuazhen Road
Shanghai, Shanghai 200052
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

Chongfeng Wu

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

No.535 Fahuazhen Road
Shanghai, 200052
China

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