Institutional Environment, Ownership and Firm Taxation

35 Pages Posted: 23 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: January 2013

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 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, H35

Suggested Citation

Wu, Wenfeng and Rui, Oliver M. and Wu, Chongfeng, Institutional Environment, Ownership and Firm Taxation (January 2013). Economics of Transition, Vol. 21, Issue 1, pp. 17-51, 2013, Available at SSRN: https://ssrn.com/abstract=2193151 or http://dx.doi.org/10.1111/ecot.12001

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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