What Types of Publicly Listed Firms Evade Taxes? Evidence from China

56 Pages Posted: 2 May 2018 Last revised: 14 Aug 2019

See all articles by Travis Chow

Travis Chow

Singapore Management University - School of Accountancy

Bin Ke

National University of Singapore

Hongqi Yuan

Fudan University - School of Management

Yao Zhang

Tong Ji University - Accounting Department

Date Written: February 1, 2019

Abstract

Using the mandatory disclosure of detected corporate tax evasion cases in China, we examine the types of publicly listed firms that evade taxes. We use a bivariate probit model to account for the partial observability of tax evasion. Our regression results are different from those using the reduced form probit model that ignores the partial observability of tax evasion. Our results are also different from those of prior research on the determinants of corporate tax avoidance using the effective tax rate (ETR) as a proxy for tax avoidance, suggesting that ETR may not be a good proxy for aggressive tax avoidance.

Keywords: Tax Avoidance, Tax Evasion, China, Government Ownership

Suggested Citation

Chow, Travis and Ke, Bin and Yuan, Hongqi and Zhang, Yao, What Types of Publicly Listed Firms Evade Taxes? Evidence from China (February 1, 2019). Singapore Management University School of Accountancy Research Paper No. 2019-100, Available at SSRN: https://ssrn.com/abstract=3160421 or http://dx.doi.org/10.2139/ssrn.3160421

Travis Chow (Contact Author)

Singapore Management University - School of Accountancy ( email )

60 Stamford Road
Singapore 178900
Singapore
+65 6808 5450 (Phone)

Bin Ke

National University of Singapore ( email )

Mochtar Riady Building, BIZ 1, #07-53
15 Kent Ridge Drive
Singapore, 119245
Singapore
+6566013133 (Phone)

Hongqi Yuan

Fudan University - School of Management ( email )

No. 670, Guoshun Road
No.670 Guoshun Road
Shanghai, 200433
China

Yao Zhang

Tong Ji University - Accounting Department ( email )

100 Wudong Road
Shanghai 200433
China

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